Nitin Bajaj

Hey, everyone. Welcome to the industry show.

I’m your host, Nitin Bajaj. And joining us today is Semyon Dukach. Semyon, welcome on the show.

Semyon Dukach

Thanks, Nitin. Thanks for having me.

Nitin Bajaj

Great to have you here. Let’s start with who is Semyon.

Semyon Dukach

Who’s Semyon? Well, I am an investor based in Boston. I’m an immigrant. Certainly a bit of a troublemaker. Yeah. All that stuff and a and a bunch more.

Nitin Bajaj

Yeah. I know there’s a lot more there, but that speaks to your humility. So I would add that, as part of the who is Semyon. Very humble down to earth person. Tell us about One Way Ventures. What is it? What’s the mission? And a little bit about the size and scale.

Semyon Dukach

Yeah. One way is a venture capital fund. We specifically only back companies started by immigrants. We believe that immigrants make the most awesome entrepreneurs, but immigrants ourselves like immigrants, but we also observe that, the immigration experience, is both entrepreneurial and predictive of outsized outcomes. Like, the the immigrants, all else being equal, they tend to not give up along the way. They tend to, operate better in a confusing environment in a new market. They don’t understand when they started the company necessarily. And, the facts basically support, the thesis in that, a significant majority, 55% of all the unicorns that ever have been built were cofounded by immigrants. And so, that’s that’s our course thesis. We do invest in technology. And like most VCs, we are looking for very large outsized, results, in accordance with the power law of venture investing. So we’re looking at extraordinary immigrant founders building really big businesses, specifically, immigrants from all over the world, but but businesses based mostly in the US and Canada. Size wise, we are investing out of our Semyon fund, which is $57,000,000 in size. Our first fund was 28, and that was started 4 years ago. 2nd fund’s about a year old, so we’re only about a third of the way into into that.

Nitin Bajaj

And what’s the typical size of investment?

Semyon Dukach

A $1,000,000 check is quite common. Some sometimes a little less, sometimes a little more.

Nitin Bajaj

And in terms of you said this is specifically in the US. Do you follow the do you follow the startup? So if a startup started in the US but is now doing operations outside of the US, And if they’re raising funds for for those purposes, do you kind of go to a second, 3rd round?

Semyon Dukach

Sometimes. Yeah. We we we have probably our most successful investment so far is a company called Chipper Cash, which is started by African immigrants, in San Francisco, but which operates in Africa Nitin in, like, 8 different countries in Africa. And so, you know, we were fortunate to be have been investors since the first round, and we invested in in all subsequent rounds either out of our limited fund reserves or for the larger rounds. We run special purpose vehicles mostly for our own existing investors, but, you know, additional funds on top of the fund of what the fund will allow, to invest in these larger rounds. I mean, Chip has raised a lot of money at this point. Right? It’s it’s a unicorn company. I think probably the most the most exciting fintech unicorn in Africa today. Definitely exciting one. So, yeah, in general, it’s not you know, the mission of our fund, is to back immigrants, but more broadly, you know, to back back people who think globally, who are not, like, loyal to particular country because, you know, we really believe in the world, without firm borders. We think people should have the right to work or to build a business, you know, anywhere they want. Like, the random circumstances of their birth, which determine their passport, should not limit their opportunity. Like, we just think that’s wrong. But the US focus is mainly because we’re still small, and we are based here ourselves. Eventually, we we plan to expand to other regions and to back people, you know, moving from anywhere to anywhere or maybe even people who just think globally from day 1 and don’t necessarily need to move. We are looking a lot in in West Africa, Nigeria, and we actually have small fund to fund investments, in in very early stage funds in in Nigeria, in Eastern Europe, and other areas. We’re looking for 1 in in South America as well so that we can sort of start tracking these companies maybe before they move here. But for the time being, our primary direct investing is is focused on US companies.

Nitin Bajaj

Right. You know, immigration is a challenge. It can take several years, can have several issues. Now on the other end, the statistics are amazing. Right? That prove that immigrants have had an outsized impact, not just in the in the startup world, but in other economies and other industries. When you look at your fund and in working with a lot of these startups and founders, what’s that one big challenge you’re facing?

Semyon Dukach

That they’re facing or that we are facing as investors.

Nitin Bajaj

Well, immigrants obviously are facing a lot of challenges. But you as an investor in these immigrants, in these, companies, what’s the challenge you face?

Semyon Dukach

You know, the challenge is, to the deal flow is really important. Right? You want to make sure that, most, founders who build great unicorn companies who are in our demographic for immigrants actually visit with us and show us what they’re doing in the early stages. And for the most part, I think we’re doing we’re doing well with that, in that not not only do we have a bunch of really successful outcomes in our portfolio, like ChIPAA and Brexit and a few others, But we also have a pretty pretty, strong anti portfolio, if you know what I mean. And then the portfolio is made up of companies that you had a chance to invest in early but past. Right. Because you can’t always know. Right? You don’t always make the right decision. You can’t always say yes to everyone. You have to choose, and you have limited information. But if you have a very big anti portfolio, which we do, we have, like, dozens of unicorn outcomes in the anti portfolio. We know that our deal flow at least is strong. We are generally we have we have a strong enough brand. You know? Immigrant founders wanna talk to us, because we are, one of only 2 funds out there that have this general focus. And, you know, it’s exciting. We bring we bring a whole, way of thinking and community, right, to these founders. We basically help them expand their identity from their ethnic group to immigrant in general in the US. And that’s like that’s a very powerful thing. Right? Like, we we can combine the Indian mafia with Israeli and, and Ukrainian or whatever. Right? And it’s it’s just it’s it’s a strong thing, and founders appreciate it. But, let’s see. I don’t wanna avoid your question. So challenges that we have, you know, scaling the organization selection is is challenging. Supporting all these companies, there’s just a lot of them. Right? Like so as you have more and more companies in your portfolio, it’s very challenging to to find the time to to be sufficiently helpful. And we are addressing that, I would say, by following less and by by trying to only lead rounds and to, you know, have more kind of ownership targets where where we can’t if we can’t get 5 or 10% of a company, we’re just gonna have to pass because we we just can’t. You know? We don’t wanna dilute our ability to help. That’s one challenge. There’s many challenges. Right? Like, immigrant founders in general, I would say, have have challenges around fundraising or communicating, you know, if English is not their first language, and they don’t have a strong network. But, you know, they overcome them. That’s the thing. They they win on persistence.

Nitin Bajaj

Mhmm.

Semyon Dukach

And persistence goes a really long scrappiness, persistence, direct those things are really important. And it’s not necessarily the countries they’re from have, like, better cultures for entrepreneurship than America does. They they they generally don’t. It’s that the specific people who have moved are selected out of a very large group. Like, most people stay where they are. Right? Like, by nature, they’re having picked their butt up and gone. And and, you know, there’s a lot of social pressure against doing that. Right? Like, people, friends, families don’t generally encourage them to leave. Right? It it’s viewed as a bit of a betrayal. So when you do make that journey, you’re very reluctant to go back without success. Right? Because people will say, I told you so. You know, who do you think you are? You just wanna ask, like, stay here. Right? So, that sort of thinking, causes, I think, on average, a lot more persistence. And, you know, if you’re very persistent, well, eventually you get lucky. You know, the market’s turn and and you get tailwinds. And, you know, COVID comes and it happens to help you businesses that have heard it or whatever. Right? Mhmm. And there’s other the other advantages that immigrant founders have for sure. Like access to engineers Mhmm.

Nitin Bajaj

That that

Semyon Dukach

are who are cheaper. Right? Like, for example, most countries that the immigrants come from have, offshore developers available that are difficult for a startup to utilize if they don’t have a cofounder from the culture themselves.

Nitin Bajaj

So true. And, you know, as you look at so first off, congratulations on the multiple successes. The other thing I wanted to you know, I kept nodding my head, like, really strongly because everything you said, I’ve been through that. I lived through that, as an immigrant myself. So you you start touched on a a lot of different chords over there, including the social pressure, the peer pressure, and the familial pressure that, you know, why the heck do you wanna leave? Right? You have everything here.

Semyon Dukach

So when

Nitin Bajaj

you when you do, come with all of those, I guess, for lack of a better term, that baggage, you want to make something out of yourself. And, the fact that immigrants are so good at adapting and adopting the new culture that, you know, they go into. Kinda makes them a good fit for pivoting across the different, challenges that we face in our entrepreneurial journey. So thanks for highlighting those and kind of, you know, providing a really good summary of of the why. As you look back in your own career as an entrepreneur, as an investor, Semyon who ran Techstars, You know, you’ve you’ve been exposed to a lot. You’ve been through a lot. I would love for you to share 2 things. 1, a success story that you’re really proud of and want to show off even if a little bit, on the other end, something that did not work out as you had planned and became a lesson.

Semyon Dukach

I’ll do better than that. I will give you one story that is exactly both of those things.

Nitin Bajaj

Okay.

Semyon Dukach

About that. The story that, some of your, viewers may be familiar with. Mhmm. A very long time ago, I became known for, running a group of people from MIT where I went to graduate school

Nitin Bajaj

Mhmm.

Semyon Dukach

That ended up using quantitative methods to beat the casinos, around the world out of 1,000,000 of dollars, effectively. Right? And that that was certainly a success. It, was considered to be impossible, and yet we actually did it. And, it was a lot of fun, and we we learned a lot of lessons. But for me, at least, it was also somewhat of a failure because I spent about 4 years of my life, doing mostly that, having previously, studied computer science and, in fact, having having worked on some very interesting things, I worked on virtual reality as an undergrad at IBM Research. And then at MIT, my my thesis was on a very early way to move money on the Internet. So sort of like like a PayPal, but, you know, or much earlier before the web. Mhmm. And while I was playing blackjack, the web did appear, and the Internet became huge. And PayPal was founded, and a lot of other things happened. And, it it by 97, I I was very bored of blackjack. We weren’t really creating any value. Nobody ever thanked us for doing you know, it was like, it worked. It was fun. We made some money. We all would have made a lot more money if we did other things, honestly. But, you know, the the the mistake was doing it for that long. Like, it was super cool thing to have done, but it was not at all a worthwhile use of several years of my life, right, in retrospect. So by the time, you know, I started a software company, I I think its scope was much more limited than it would have been had I just stuck stuck with their software engineering the whole time.

Nitin Bajaj

But I think the whole blackjack beating the casinos was a lot more fun, more adventurous.

Semyon Dukach

Those are the ventures. It was definitely you know, building a business is an adventure too. That’s true. And like like I said, like, it was a success. I’m glad. I’m very glad I did it, but, you know, time is your most precious resource. Right? The and sometimes the opportunity cost. Like, I I’m pretty sure, that if I stuck with work on on core Internet payment infrastructure

Nitin Bajaj

Mhmm.

Semyon Dukach

You know, who knows? Maybe I would have followed a trajectory of molecular Semyon Musk who who who did exactly that, right, and sold the company to PayPal and etcetera. I mean, Nitin not to compare myself to Elon. Right? But I’m sure I’m not not, you know, that that kind of brilliant entrepreneur. I’m probably much more of an investor anyhow. But still, it was a huge opportunity cost.

Nitin Bajaj

Mhmm.

Semyon Dukach

And so while I encourage this amazing persistence in the founders in my portfolio who have a huge passion for the product they’re building for their own customers, who are driven by motivation to, you know, make the world a better place for people they really care about. Right? Or with people they really care about when they really care about their team and they have this founder market fit, then then persistence is incredible. And I just love the fact that they don’t give up when everyone else thinks there’s nothing left. They just keep going and they win. You know? If they don’t have all that, persistence is actually a really bad trick. Right? Because you can waste your life. You know? You can just years of life can go by. You can hang in there by a thread instead of, like, doing something where you would shine. Mhmm. You know?

Nitin Bajaj

So true. And that’s why it’s really important to have a mentor, Someone who’s been there, done that, learned those lessons to guide you along that journey. Right? They may be able to tell you, give those signs, give those indicators that, you know, hey. Maybe you wanna try something different or just, you know, call it the end and move to something else. Take those learnings and go on and do something different.

Semyon Dukach

That’s right. That’s right. And I mean, nobody can really tell you that. Right? True. People could give that advice and, like, if if if you’re really passionate about what you’re doing, it’s not gonna change your course. So you’re not gonna listen to someone who tells you to shut it down. Right? So so if you’re a mentor, the safe thing to do is to advise someone to shut it down or advise them not to take not to start the company, keep the job. You know? Like, the real entrepreneur, you’re not gonna keep them from starting the company because you told them. But but the guy or girl who does listen to you, they have no business in a company in the 1st place. So it’s always safer and bit wiser to tell them not to do it. Like, even if you of course, you want them to do it because I have an entrepreneur. I want, you know, the person, the kid I’m talking to, I want him to be an entrepreneur. Right? But I’ve learned I have to that’s another, you know, lesson learned. You know? It’s dangerous advice to encourage people who who would only start a company with encouragement. Right? If they need encouragement to do this, like, they’re not gonna get that far, and so you’re kept doing it with the service.

Nitin Bajaj

True. You know, we we actually may have ventured into the into my favorite part of the show. We call it one line life lessons. And I know you dropped a couple of lessons in there, but let’s do it more objectively. We’d love for you to share a few of your one line life lessons with us.

Semyon Dukach

Well, lessons. Well, you know, I I one thing I I thought of is that, you know, startup, it’s kinda like, one of these, fighter jets. It’s Uh-huh. It’s it’s very fast and nimble. Right? But it’s not it doesn’t if you let go of the controls, it just crashes. Like, it doesn’t have dynamic stability. Like, most planes, it’s they they’re stable. Like, if they turn too steeply and you let go, they kind of stabilize. Yep. You know? But the fighter jets, they don’t. They just, like, go out of whack, but it enables them to turn really fast. So start up source of bigger companies are kinda like that.

Nitin Bajaj

Love that.

Semyon Dukach

You know, that that’s that’s one. You know, there’s there’s many lessons. Like, an obvious one that anyone who’s ever mentored a startup or been on the board of a startup, knows that when the when the founders, the CEO comes to you, with a dilemma about whether they should fire this person who is not working out that well or keep them because, you know, they’d be hard to replace, and there’s a lot of value anyway. And they’re just not sure. Right? Like, the correct answers that they should have done it, you know, a few months ago or weeks ago. Right? It’s it’s, it’s never the case that waiting longer is is, worthwhile. True. So people sort of make the mistake of of indecision. I don’t know. Focus is always the most critical thing that that people never have enough often. And when people think that, they have to do multiple things because they can’t afford to focus on any one segment or one type of customer because they don’t really know which one is right, and they have to try try all of them. Like, one day later, when they discover which one is most effective, they’ll focus. But right now, it’s too risky because, like, what if I picked the wrong segment? You know? Like, they just never they never grow. Like, they never grow fast. And, paradoxically, when they finally take the risk, right, and and narrow down to something very specific, they they accelerate. And then if they’re smart, they actually get more specific, and they get really focused. And, paradoxically, instead of, like, shrinking, you you just, like, grow incredibly rapidly. Right? Because you actually become a dominant a dominant player, a known brand in some specific Semyon. And, only with that dominance can, you know, continue to expand. Again, this is not an original thought by any means, but it’s it’s one of these things that’s often very obvious to anyone who is advising, but extremely hard to know this when you’re asking for the advice. Like, you you like, almost no one is actually focused enough. Like, people just do many things. And, yeah, the the you gotta take a risk, right, and do one thing really well. You do the wrong thing, well, you know, pivot. Right? Pivot, but don’t don’t simultaneously do 10 because you’re not sure which one is right. Like, that’s not just not gonna work out.

Nitin Bajaj

So true.

Semyon Dukach

Is that enough life lessons? I need more.

Nitin Bajaj

If you have more, I’ll take them.

Semyon Dukach

I’m sure I’m sure I have more. But, I wanted to also mention the nonprofit. I’ve been building, you know, last 2 months. There’s been a war in Ukraine, and I’ve gotten extremely involved with this nonprofit, that I started with with my wife and several other people called cash for refugees. Mhmm. Cash for refugees.org. And, we’ve actually, at this point, had hundreds of volunteers, give give away over $1,000,000 to 1,000,000 of of refugees. It was like cash direct cash payments in hand on the ground in and around Ukraine. So it’s been a really intense, fascinating thing that I’ve probably spent over half my time on in the last couple of months.

Nitin Bajaj

So Thank you for doing what you do, and, I know it’s it’s not easy. I know you’ve even traveled there to set a lot of this work and do the work on the ground. So thank you again. It’s I hope and a lot of us hope that this would have never happened, but now that it has, you know, what can we do? So we would we’ll make sure to put the link to the to the nonprofit in the.

Semyon Dukach

Thank you. Please put it in because we we are accepting donations. It’s tax deductible. We actually have recently received the full in the nonprofit status, ourselves. We don’t have to partner with anyone. And, there’s also a lot of opportunities to volunteer, especially for people who speak one of the languages, like Ukrainian or Russian. I look at it like that.

Nitin Bajaj

True. Well, thanks again for doing this, and, thank you for being with us here today. We really appreciate you sharing your journey and the life lessons with us, and we would love to continue, staying in touch and tracking all of your continued success.

Semyon Dukach

Thanks very much, Nitin. Thanks for having me.