A Trip to Lithuania

David Brown and I are just returning from a 7-day trip to Lithuania (Tariq Trotter is heading up the 50th year of hip hop tour with his friends, so he couldn't join us). We were in the country to explore the notion of prosecuting Impellent Ventures' strategy of serving as the connective tissue between the US hubs (SF, NYC, Boston, LA) and emerging ecosystems (everywhere else) - we try to invest in hidden gems or overlooked cities and help our portfolio companies out with connections to big-city downstream capital and experienced mentorship. The strategy has been working thus far, and dare we say in a big way. We wanted to see if it made sense to check out Europe early in this journey. It was an informational tour, of sorts.

Our whole thesis revolves around trying to build a top-1% early stage venture technology firm that roots out power law opportunities before other firms get a chance to see them. We liken these cities to estuaries - places where life finds foothold prior to swimming out into the big blue. We’ve stuck to our knitting, and it's been that way since David founded the firm and tested out the thesis in his hometown of Rochester, NY, connecting WNY budding portfolio companies to his adopted home of ten years, Boston.

We believe that genius is evenly distributed by zip code - access to capital and powerful networks, however, is not.

The reason we took our friend Apolinaras "Apollo" Sinkevicius' offer to connect with the gracious hosts Alex Gibb and Martin Klug, et al., in a jam-packed tour de force of the city of Vilnius was twofold: 1) Apollo wouldn’t shut up about how amazing and dynamic his home country's startup renaissance has been for the better part of 4 years, and visiting was the path of least resistance for us, and 2) although we have plenty of work to do in the US, we thought it prudent to check out what a bustling European country's ecosystem was up to and whether we were right that it was beginning to look attractive from a cross-country arbitrage standpoint. There are strong parallels to what is going on in the USA's "second cities" and the European states.

Regardless of how fun it is to visit a new country and experience a week of travel, David and I have young families and neither of us relish being away from them for long periods of time - and our wives, extremely busy professionals themselves and mothers of dragons, count on us to pull our weight evenly with childcare and the keeping of households (actually, I’m sure no matter what we did that we’d ever be “even” with working mothers in terms of resilience, bravery, strength, and sheer force of will).

And despite what many may think of a GP's role in a VC firm, we are extraordinarily busy, much like many of you. In essence, we keep the yacht parties to a minimum and are even open for business in August.

What all of this means is that there is a large opportunity cost to branching out across the pond - and we're still evaluating what that could look like in the future. We are, at the moment, with no plans to change, an entirely US-based firm that has historically invested in Delaware C companies. But we are also agile, and aim to be like the founders in which we invest - scrappy, daring, unbound.

Lithuania is a dynamic, powerful place. In current state, the founders are brilliant, gritty, focused on unit-cost economics, and battle-tested. They don't shy away from academic conversations or in-the-trenches, hand-to-hand combat. They're whizzes at engineering solutions and marketing their wares. It's quite breathtaking given that the economy has only been rid of communism since 1990 – a quintessential hockey-stick of startup GDP growth. The country startup spirit is unrelenting and unabating.

Recent successes include Tesonet, NordVPN, Vinted, Kilo Health, Bored Panda and others. The founders and family offices of these companies are actively participating in the community. There are accelerators, angels, strong talent coming out of local universities, and UNPARALLELED government participation in the fostering of investment into the ecosystem. The Ministry of Economy and Innovation, Invega, and the players running point are moving fast and remaining flexible in their pursuit to spur on innovation - even more so than most governmental programs in the US. It's quite impressive.

We found that what the ecosystem may need now is what every burgeoning upstart needs - attention, access to downstream/outside capital, and access to mentorship/a general broadening of startup horizons - I believe that Lithuania could benefit from a stronger bridge to the USA, and I believe that the USA could benefit tremendously from that as well. There is strong engineering and marketing talent waiting to take on exciting missions. The prices for both talent and startup valuations are a bargain at the moment. It could be a win-win for both countries. I see exciting things on the horizon. Time will tell as to how exactly Impellent gets involved, but I’m bullish at the prospect.

We'd like to thank all of those who met with us and spent some time helping us get to know your home and startup sandbox. We left energetic about your future - and intent on getting to know you all a bit more. Ačiū!

cc/ Aivaras Čičelis Daiva Rakauskaite, CFA Justinas Pasys Justinas Milašauskas, CFA Zygimantas Zabieta Vladas Lašas Dominykas Stankevicius Greta Monstavice Per Moller Algimantas Padegimas Mantas Urnieza Jonas Iržikevičius Gerda Sakalauskaitė Remy Salters Audrius Milukas Oskaras Ziferman Gediminas Peksys Matas Ignatavicius Miglė Rakauskaitė-Šumskė Laurynas Kundrotas Aurimas Steponavicius Tomas Banišauskas Gintare Verbickaite Andrius Milinavicius Inga Langaite 🦄 Vytenis (WeTennis) Pakenas JB Daguené Marijus Andrijauskas Dmitrij Sosunov Vytenis Pavalkis Rokas Tamošiūnas Karolis Žemaitis Darius Sulnis Vilija Šveikauskienė Viktorija Trimbel