Good ideas are where it starts. To become a sustainable business, they also need capital, expertise and partners who see a startup's potential beyond its first results.

By supporting BESCO and the Hall of Fame, Fund of Funds (FoF) stands behind the entrepreneurs who create value and expand what is considered possible in Bulgaria. The partnership is part of a longer-term commitment to developing an environment in which promising companies have access to financing and the opportunity to bring their ideas to life.

To discuss the journey so far, today's partnerships and the next steps, we spoke with Alexander Nenkov, Executive Director of Fund of Funds.

Past

Established in 2015, Fund of Funds manages public resources from European programs and national co-financing through financial instruments. Its task is to improve access to finance and to direct investment to areas where the market does not provide enough opportunities for development.

Behind the term "financial instruments" are concrete solutions: loans, guarantees, and equity and quasi-equity investments. They allow public resources to attract additional private capital, and the funds that are repaid can be used again to support new projects and companies.

The contribution to the entrepreneurial ecosystem is especially visible in venture financing. FoF has supported more than 300 companies, and between 2019 and 2023, three out of every five startups that received venture financing in Bulgaria were backed by its equity instruments.

Behind these numbers are entrepreneurial teams, developed products and opportunities to enter new markets. This is the point of the model: financing that creates the conditions for long-term development.

Present

The work of Fund of Funds begins before the investment itself, with studying market needs, structuring suitable instruments and selecting financial intermediaries. Banks, financial institutions and fund managers then evaluate projects, provide the financing and monitor how the investments develop.

"Our task is to connect public resources with market expertise, so that more promising companies get the chance to grow. Together with our financial intermediaries, we work for businesses that can start in Bulgaria and compete in international markets," says Alexander Nenkov.

The partnership also has a broader goal: to develop the local investment market and its ability to attract capital. For entrepreneurs, this means more potential partners, more diverse financing options and access to accumulated management and investment experience.

"We aim for public resources to attract more and more private capital, including from international investors. For there to be lasting interest in Bulgaria, we need to develop the ecosystem itself, with skilled fund managers, promising companies and successful investments. That is how we lay the foundation for the next stage of growth," Alexander Nenkov emphasizes.

For Nenkov, an essential part of this work is the expertise of the Fund's team and its ability to understand the changing needs of business. Accumulated experience has value when it is built upon and applied in working solutions.

"You have to keep developing your knowledge and understand in depth the field you work in," he adds.

Future

In the 2021–2027 programming period, the new generation of financial instruments expands the options for supporting businesses, from the early stages of development to growth, innovation and digital transformation. Alongside financing entrepreneurial ideas, the focus includes the development of high-value-added technologies.

The long-term ambition, however, goes beyond the size of the resources provided. It is about building a market where more investors recognize the potential of Bulgarian companies and are ready to take part in their development.

"Public capital plays an important role where financing opportunities are still limited. Our goal is to use it to encourage private investment, not to replace it. Success will be more and more companies finding the capital they need to grow in a more mature and self-sufficient ecosystem," says Alexander Nenkov.

This vision requires work beyond financial instruments. Partnerships with entrepreneurial organizations and the academic community, as well as initiatives for young entrepreneurs, are part of the Fund's efforts to develop knowledge, skills and connections among participants in the ecosystem.

"A strong ecosystem needs active entrepreneurial organizations, accelerators and mentors. Their capacity is just as important, because it helps teams turn their ideas into businesses and be better prepared for the next step," says Nenkov.

This is where the mission of Fund of Funds meets its support for BESCO and the Hall of Fame: in recognizing what has been achieved and in the commitment to creating the conditions for the next entrepreneurial successes from Bulgaria.