CEO Club members Dmytro Dubrovskyi (co-founder of Uklon and the Nezlamni investment fund) and Taras Kyrychenko (chairman of the Supervisory Board of Nova Poshta and co-founder of TOLOKA. VC) discussed the philosophy of money, its role in human life, and how to preserve and multiply one’s own funds.
Taras Kyrychenko shared his knowledge about the basic elements of investment strategy, risks, investment opportunities in Ukraine, and advised on how to avoid common mistakes. We have compiled the most interesting points from the interview.
About the first steps in creating your investment portfolio.
The first investments should be made in three key areas: yourself (education and self-development), your environment (friends and partners). This builds your social network and strengthens personal relationships, and only then should you invest in financial assets.
In fact, you should always invest. Even with your first money, when you start receiving your first salary, you should train yourself to invest 10-15%.
And you need to understand right away what your financial strategy is, what portfolio you are creating, because there is nothing more important in investing than time.
Capitalism is structured in such a way that the system gives money to those who want it. Well, you may not be lucky, of course, you may be hit by a car or something else may happen in the market, but that’s life. But in general, the system is designed in such a way that it gives money to those who want it.
About investment strategy
The essence of investment strategy is to invest free capital – money that is not your real estate or share in a business. This strategy should be individual, depending on your life goals, age and amount of capital. Investments should give you peace of mind, freedom and create new opportunities, rather than becoming a burden. Therefore, if you have free funds, it is worth creating a diversified portfolio of different assets that matches your personal strategy.
“An investment strategy is very practical in nature. It should serve you. That is, you cannot set a goal of having the maximum amount of money when I die. Bill Gates, on the contrary, has the opposite goal of dying without money. Or Soros, who gave away all his money, leaving himself with four or five billion, and that’s it. That is, you have to start from what you want from money, what you want from your life?” (Taras Kyrychenko)
About Ukraine and the World
A smart strategy is to spread investments between Ukraine and the world. Taras Kyrychenko thinks it’s best to have 25-50% of your assets in Ukraine, since it’s the place you know best and where you can get premium returns. However, keeping 99% of your assets within a single, albeit native, but small economy is irrational.
For the Ukrainian market, he recommends government bonds in the national currency, as he is confident in the Ministry of Finance’s ability to meet its obligations. In addition, he points to the possibility of investing in Ukrainian real estate and corporate bonds. Foreign currency deposits can also be considered, which, although they generate a small income, are better than zero returns.
About investing in start-ups
Is it worth investing in Ukrainian miltech?
Miltech is currently a super trend in the world of investment, as the level of conflict in the world is growing. However, most Ukrainian companies in this industry are not yet ready to work with investors. They believe that investments should come only because it is Miltech. Nevertheless, responsible companies are already emerging that are building businesses in which it is possible to invest. This is a smart macro trend, and European and American forecasts for investments in Miltech confirm this.
‘Our country is divided into two parts. There is the front line and the rear. Those who are not on the front line must help the country from the rear. Therefore, if you can invest in Miltech and this Miltech brings additional opportunities on the battlefield, that’s great.’ (Taras Kyrychenko)
Three mistakes when investing in start-ups
Investing in start-ups that are too early stage, requiring a long wait (10-15 years) and carrying higher risk
Investing in what ‘comes naturally’ instead of actively seeking out quality opportunities, which often require larger cheques (e.g., $1-3 million) that can only be obtained by joining forces with other investors.
Legally incorrect execution of agreements.
To avoid these mistakes, you need to follow a clear exit strategy in 3-5 years and ensure proper legal execution for all investors.
About strategy, diversification and peace of mind
“For many Ukrainians, this is a great opportunity to learn how to make decisions and form their investment strategy. The only thing that applies to all investments, including venture investments in fast-growing companies, is diversification. Don’t make just one or two investments. It’s better to invest smaller amounts in each, but make 20 investments, rather than investing £100,000 in one company and going to church to pray. That’s not very smart. But 20 investments of £10 each is very smart.
And if you have a strategy, believe me, it will work much better. Investments should not keep you awake at night. The key thing is that the collapse of a certain asset class or category of your investments should not throw you off track in life. Well, if you lose 10-20% of your money, you won’t die. And if you can’t sleep because you lost £1,000, then it’s better not to invest. Invest smaller amounts or in less risky assets. Reduce your risks. Sleep peacefully.” (Taras Kyrychenko).
Based on materials from YouTube CEO Club Podcast
