On October 7, 2021, CEE Legal Matters reported that Kocian Solc Balastik had advised Czech technology accelerator AI Startup Incubator on its investment in US-Bangladeshi OpenRefactory. CEE In-House Matters spoke with Angelo Burgarello, Business Development Director at AI Startup Incubator, to learn more about the investment.
CEELM: Tell us a bit about the AI Startup Incubator.
Burgarello: AI Startup Incubator is an AI-focused Incubator based in Prague, Czech Republic) founded in 2017 as a joint stock company. While we define ourselves as an "Incubator" we act more like a hands-on investor in early-stage AI startups. Our approach to the incubation/acceleration of startups and mentoring is direct and tailored to the startups' real needs. If a company needs help with business development we select and onboard a hands-on mentor who will take care of this. We provide consultancy and direction on the AI features implementation thanks to our team of AI experts. A team is built to help out the startup with a clear set of goals *milestones plan" which the team together with the founders need to achieve. We have a highly dedicated team of individuals ranging from AI Ph.D. experts, mentors, and successful entrepreneurs, passionate innovators, coaches, educators, and academics.
We mainly work at a European level but we also look beyond the EU, supporting Start-up ecosystems with the means to tackle their needs from an early stage of maturity from early to growth stage. Our goal is to support and fund small organizations/individuals (start-ups) in accessing finance and/or increasing their traction, growth in revenues, and size, among others. We do collaborate only with startups we invest a ticket in. We are industry and geographically agnostic but laser-focused on AI technology. We are able to invest tickets directly that span from EUR 50,000 to EUR 250,000 and syndicate with our investors' partners to reach ticket size up to EUR 1 million.
CEELM: What was the rationale behind the investment into OpenRefactory and what made the target particularly attractive to you?
Burgarello: Currently, most software developers have to spend hours searching and evaluating bugs in code. This process leads to ineffectively used time and large extra costs. We see a future in services such as OpenRefactory, due to the fact their team brings a solution that supports software developers, letting them focus on the fun parts of coding instead of looking for bugs that can be instantaneously fixed.
CEELM: What are the next steps?
Burgarello: We are currently working with the team on a new communication strategy to better and clearly address the values for the clients. On top of this efforts are exerted in order to penetrate the EU market.
CEELM: What were the most complex aspects of the deal?
Burgarello: This was a direct equity investment and AISI acted as a lead investor. Being a lead investor is always a more difficult position because the terms and conditions must be set up not only to match the current investment entities but make sure that there are no obstacles for future investors to join the venture. Finding the right balance is a very important matter.
CEELM: And why did you opt for KSB as your legal counsel on the deal?
Burgarello: KSB is definitely one of the best law firms on the Prague scene. With our primary point of contact, Ota Mach, we are able to quickly identify the must and nice to have features of the investment agreements and move on negotiations and agreement of the terms in a quick and efficient manner. It is never a matter of having the perfect agreement but the perfect agreement for the specific case. This is why we tailor the contract taking into account the level of risk and maturity in every investment we make
