David Kezerashvili Discusses The Dynamic Relationship Between Venture Capital Firms and Start-Ups

Start-ups have become a significant part of how industries drive innovation.

They are leaner and more agile than established organizations, allowing them to seek more daring and unconventional solutions. Today, many innovations are developed by start-ups which are eventually bought out by larger businesses that incorporate their technology and ideas.

This is an effective framework for bringing innovative ideas into realized applications quickly, but start-ups still face many challenges early on. They require investors from the very beginning to develop their ideas and technologies, and the costs can be substantial for even the smallest start-ups.

Venture capital firms are one of the primary sources of capital for start-ups. Many venture capital firms provide strategic assistance to promising start-ups long before their ideas have been demonstrated enough to warrant being purchased by a major company. This bridges the gap between conception and realization that many start-ups are unable to overcome. One of those venture capital firms is Infinity VC.

Infinity VC’s Start-Up Ventures

We had a chance to speak with the former Georgian defense minister and current venture capitalist David Kezerashvili about how his venture capital firm Infinity VC is investing in start-ups. The firm focuses on investments in Fintech, mobile technology, and other areas where agile start-ups are driving innovation.

Kezerashvili believes that this is the direction for his firm to take because of the wide-ranging impact that innovative start-ups have on the economy compared with other potential investments. He told us, “Investing in tech start-ups is driving the production of more real value, creating beneficial technologies and products, building high-quality employment opportunities, and increasing revenues across the board.”

Infinity VC has funded start-ups developing solutions in areas like AI implementation, multi-channel commerce, and mobile infrastructure, among many others. The commitment to investing in innovation is allowing start-ups to provide practical solutions to problems in many industries.

The Unique Role that Venture Capital Plays in Start-Up Development

In 2020, venture capital investment in the United States was nearly $130 billion, invested in companies at various stages of development. Much of this was invested in businesses at their seed stage, the very earliest rounds of funding. The money comes at a crucial point for these start-ups, where rapid growth is often necessary to continue development.

There are, of course, other potential sources of funding for start-ups. Traditional bank loans are sometimes available but have more stringent requirements for demonstrating current value. Grants and subsidies from government sources also have strict and sometimes seemingly arbitrary requirements. Venture capital firms carefully evaluate the merits and potential of the core ideas being developed, offering funding where other sources fail to deliver.

Venture capital is often the only available source of funding for start-ups in the early stages of developing their ideas. Kezerashvili told us, “These are organizations with brilliant minds behind them, often very small teams dedicated to turning their central ideas into real solutions. Infinity VC is helping them make that a reality.”

Staying Close to the Heart of Innovation

Investment firms of most kinds are largely removed from the actual companies and people they invest in. Decisions are the stuff of spreadsheets and analysis, and why shouldn’t it be for organizations that exist to derive a profit from their investment? There’s no doubt that venture capital firms intend to profit from their investments, but they play a more involved role that keeps them closer to real entrepreneurship.

Kezerashvili spoke very highly of his experience with the start-ups he funds through Infinity VC, telling us, “I am truly grateful for the time I have spent with the people behind these start-ups and for being able to watch true innovation and entrepreneurial spirit flourish.”

Venture capital firms make investments about something more than ROI and portfolio performance when they choose to finance start-ups. They become an active part of the start-up spirit that is driving the innovation and new technologies necessary to build a better future.

The Future of Start-Up Funding

There aren’t any indicators that the relationship between venture capital firms and innovative start-ups is going to begin to wane within the foreseeable future. In fact, we see the opposite. As the world continues to face ongoing and new challenges, the demand for innovation will only increase. And with that demand, so too will the need for reliable funding for early-stage start-ups.

“Investing in start-up organizations through Infinity VC has shown me a glimpse of what I believe to be the future, where a new kind of relationship is defined between venture capital firms and the endeavors they support” – David Kezerashvili