Angel investments in small ecosystems

By Igor Madzov

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Author biography

Igor Madzov has been an investor, entrepreneur and ecosystem builder in Southeast Europe for over 15 years. He supports and helps companies throughout the Balkans fundraise with his venture advisory NEST group.

He is the acting president and co-founder of Startup Macedonia, an association created by a group of Macedonian startup enthusiasts, experts, investors, accelerators and organizations. 

He previously worked for South Central Ventures, a VC investing in Southeastern Europe. Igor was also an investment facilitator for the Swiss Entrepreneurship Program. 

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North Macedonia, a Balkan country of 2 million people, is growing its startup ecosystem. The talent is there, supplied by a robust IT outsourcing sector. Exits in nearby countries such as Romania and Serbia prove that the region can birth lucrative startups. Ambitious Macedonians feel it’s their turn. 

Over the past couple of years, the ecosystem has evolved. Macedonia has positioned itself as both a location for quality IT outsourcing services and as a launchpad for new tech products. The government has centralized its support to startups through the Fund for Innovation and Technological Development (FITD). Companies such as Rumble, Cognism, Embed Social and others are some of the early Macedonian successes acting as role models. 

A substantial chunk of the ecosystem’s funding is still “development money”, from the European Union (EU) for example. 

Proper commercial capital has started to emerge. VCs such as South Central Ventures have been writing checks since 2017 and angel groups such as Keiretsu Forum SEE, CEED and Zephyr Angels have formed. But it’s time for more, especially on the angel investor front. 

Explaining the lack 

If the ecosystem is growing and regional proxies for success exist, why is local angel investing scarce? 

In part because would-be angels don’t understand startups. Many wealthy Macedonians built their businesses during the transition from Yugoslavia to the modern Macedonian state, in the 90s. They fail to conceptualize how a Macedonian digital product can grow 20% a month and be sold in the US or Western Europe.

For them, a successful business is physical and local. Startups are digital and global. They particularly struggle to understand tech startup valuations.