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Intuition and motivation are key for the start-up’ s success

9 out of 10 start-ups do not survive. What are the challenges and tools to support the starting businesses - the executive director of the Bulgarian Development Bank and Vice-Chairman of the Board of Directors of Jobs MFI Nikolay Dimitrov in an interview for News.bg.


-Mr. Dimitrov, the business start-ups in Bulgaria face a number of challenges. The statistics are quite bleak-95% of the start-ups are failing in their first 2 years of existence. How they can be supported to resist, strengthen and develop?


It’s true that 9 out of 10 companies are failing to move forward. That is why the ones who succeed often outperform. The start-ups’ potential of was appreciated by BDB’s group more than a year ago. As the bank as a credit institution has many regulatory constraints, we had to figure out what could be the new instruments and products we can offer to cover the market gap in financing new companies. To do so, we created two new subsidiaries - BDB Capital investment fund and BDB factoring, which target the start-up entrepreneurs as well. The fund, created to support the entrepreneurs with equity, is already preparing its first transactions.
The BDB Factoring aims to support small and medium businesses in accelerating their working capital. Most start-up companies have no assets to secure a credit, but do have a market. And they often contract first-class clients, the receivables from which BDB Factoring can purchase and thus accelerate their working capital.


- At an economic forum in Sofia you announced that the first transaction of the Capital Investment Fund will be announced within a month. Can you share with us some more details?


Yes, this is correct. Our efforts are aimed at supporting the growth of Bulgarian entrepreneurs. A large number of companies in many sectors have already reached maturity where additional capital investment becomes necessary. The Capital Investment Fund is currently examining several potential transactions in the health, tourism and manufacturing sectors.


-How many start-ups have been supported so far by the BDB Group?


So far, BDB has supported the start-ups mainly through its subsidiary the Microfinance Institution "JOBS", where the supported clients are over 1 000. The financing ranges from 1 500 to 50 thousand leva, i.e. we are talking really about starting a business here. Our clients are not only companies of the high-tech sector, which are normally associated as start-ups. We have many supported companies in traditional industries such as agriculture, FMCG, transport, so we support every starting business with a good potential.

-What should a business idea look like to be eligible for funding by BDB? Can you give us some practical advice on access to equity for small and medium businesses?


The main idea is to bring value added, i.e. to bring a product for which the market is there. If there is a market, it would be much easier to find funding – be it equity or trade finance. If the market responds well to the product and there is a market demand, the company will be supported.


-Is there a guarantee for the success of an entrepreneurial project? From the perspective of an experienced banker, what is the key to success?


Intuition and motivation. If the entrepreneur has these two, if he strives to succeed, chances are tremendously high. Many are the examples of successful projects funded by BDB. Currently, for instance, through the Capital investment Fund, we are working with a company that has an interesting innovation idea in façade construction and I hope it will be supported.



Nikolay Dimitrov has a PhD in economics and graduated from the UNWE in "International economic relations " and "Finance". In the period 2007-2015 he acquired additional qualifications in Cambridge Judge Business School (UK), Investment Banking Institute (USA), etc. His banking career started at the end of 2003 in Raiffeisen Bank and later UBB. He is part of the Bulgarian Development Bank since July 2011, leading its Investment Banking and Project Finance Department since January 2012 and Corporate Banking Division since April 2013. In parallel, during 2010-2017, he was Assistant Professor at the UNWE Department of International Economic Relations. In October 2017 Nikolay Dimitrov was appointed Executive director of the Bulgarian Development Bank.