iGaming Business magazine Futures Report 2019 | Page 15

FUTURES REPORT
THE ZEN OF THE START
Vladislavs Hveckovics imparts advice to start-ups that are considering working
with an investor, giving his view on the current state of play
S
tart-ups in the igaming sector have one
major thing in common with other B2C
start-ups: a lot of them start the race – but few
successfully finish it. In terms of venture capital,
igaming start-ups are probably not that well
covered, as there aren’t too many venture firms
that specialise in the igaming industry. I think
the main reason for this is that any venture
company needing a bit of an adrenaline rush
can get it instead from ICOs (which, dare I say,
are rapidly dying out). The igaming field is often
too disjointed and the regulation too unstable
and hard to forecast, making it an extremely
high-risk investment.
However, it’s clear that there is both an IPO
and M&A way for the successful ventures. Once
a business gets to a comfortable size, there is no
longer a lack of interest in investment, and we’ve
seen many successful acquisitions and listings
over the years.
Also, contrary to a commonly held belief,
igaming is one of those fields with relatively
low barriers to entry: you do not need a multi-
million investment in order to start making a
name for yourselves. If your idea is sound, you
have the energy and are ready to spend a year
or two working really hard, this is one industry
VLADISLAVS
HVECKOVICS
is a gaming systems
integrator, casino
back office software
developer and the
CIO and co-founder
of SoftGamings, a
B2B igaming software
company, founded in
2008. SoftGamings
offers online casino
platform solutions,
including development
of white label,
turnkey and self-
service casinos, and
advanced bonus and
loyalty engines.
“The standard start-up advice
applies: develop something that
works at least at micro-scale,
try it out and once you can
prove that it works, show it to
potential investors”
that can reward you significantly. And you can
do this without the need to sell your shares at a
low valuation.
The outlook is probably even better for
the B2B segment, which faces lower risks of
unstable regulatory environment and still enjoys
niches without the fierce competition of the B2C
igaming field.
The venture model of splitting the financial
risk from the energy risk (“wasting” time on
something that might eventually fail) is working
well. It allows entrepreneurs to lower the
performance stress significantly and actually
improves the chance of success: it’s one thing
if you spend two years of your time trying to
build something, quite another if all your savings
are on the line as well. What we see is that an
unofficial FFF network (Friends, Family and Fools)
works here just as well as in any other start-up.
Angel investors usually come a bit later and
mostly with a few successful igaming projects
under their belt.
The standard start-up advice applies: develop
something that works at least at micro-scale, try
it out and once you can prove that it works, show
it to potential investors. The longer you wait, the
better the investors and the higher the valuation
you will receive. Remember to ask yourself: do I
really need an outside investor? How will I spend
the money? A rookie mistake is to think that this
angel or seed round is your reward. It’s nothing
of the sort. All of the money will go towards the
business and you will give away a sizeable part
of your business in return.
My advice? Don’t try to sell too early. Run a
shoestring operation for as long as you can.
COMPANY PROFILE
•NAME SOFTGAMINGS •FOUNDED 2008•SECTOR PLATFORM PROVIDER, CASINO SOLUTIONS
•WEBSITE SOFTGAMINGS.COM •TWITTER @SOFTGAMINGS1
JANUARY - FEBRUARY 2019 • ISSUE 114 • 43