Alexander Galitsky. Scientist, inventor, entrepreneur who knows what a startup needs
Alexander Galitsky, a scientist and inventor, was one of the first Russian entrepreneurs to capture the interest of foreign investors with his tech products. In 1993, he managed to sell a part of the shares of the little-known ELVIS+ company for $1 million, an astronomical amount at the time.Back then, his business focus was only on digital technology solutions. So how did he do it?
When a scientist becomes a businessman
Alexander Galitsky dreamed of designing spacecraft after graduating from school. So, the number one idea for a young man from the Ukrainian countryside was to become a physicist. After graduating from school with a gold medal for academic excellence, Galitsky entered MIET.Soon physics gave way to his new hobby: computer programming. The young man realized that digital technologies were the future, and that it is the “digital” part that can create an alternative method of solving complex technical problems in spacecraft design.
After getting his degree, Alexander Galitsky was assigned to a job at the Microdevice Research Institute, where he began working on digital projects. The number of the young scientist’s patents and research articles was steadily growing, and later on, he successfully defended his PhD thesis. However, in the early 90s, after the collapse of the Soviet Union, the government cut funding for scientific research. The organization where the scientist worked transformed into several separate companies.
A young scientist, Alexander Galitsky, was appointed CEO of one of these companies, called ELVIS. In 1990, he met with people from Sun Microsystems, who came to Russia in search of talented specialists. Galitsky demonstrated his tech products to the American delegation, and the guests were impressed. Bill Joy of Sun Microsystems invited Alexander to the United States. The scientist paid a return visit to the US in 1991. After the trip, Galitsky decided to promote Soviet technology with the help of Western investments.
The entrepreneur founded his ELVIS+ company. In 1993, Alexander Galitsky’s company sold 10% of its shares to the US giant Sun Microsystems. The capital raising allowed the scientist and businessman to work on developing digital tech solutions. The team of his IT project created a Wi-Fi prototype and the first VPN for Windows OS.
Why did Alexander Galitsky choose the East over the West?
Almaz Capital – Alexander Galitsky’s venture capital firm – was established in 2008. By that time, the businessman had already won the support of large investors and found the partners. Some of the investment projects of the first fund were from Russia. Among these startups was Yandex, which came into the spotlight with its strong digital products in the 2000s and received support from the VC firm.
In 2014, the fund turned its attention to working with Eastern and Central European projects and teams from the CIS, as was required by institutional investors. Alexander Galitsky himself saw great potential in startups from these regions.
The Managing Partner is very deliberate in his approach to the selection of investment projects. It is not so much the idea as the business itself and the personal qualities of those who will be executing it that are important to the entrepreneur. That is why, for him, getting to know startup executives and personal interactions with them are a prerequisite for the business relationship.
During the pandemic, it became difficult to meet in person, so the investment process has changed.
“It is difficult to invest in a business if you have only seen its leaders on a computer screen, and not in real life,” says Alexander Galitsky. Nevertheless, during the lockdowns (2020-2022), Almaz Capital financed 8 new projects.
The most successful cases in the fund’s portfolio are the sales of Qik, Sensity Systems, Yandex, Acumatica, and Xometry.
“Russian projects have run their course”
Alexander Galitsky withdrew from several major Russian projects that were previously of interest to him. He stepped down from the board of directors at Alfa-Bank and Megafon. He left Skolkovo, Skolkovo Ventures, and Skoltech. His business relationships with the RVC Advisory Board, the MSU Business Incubator, the Venture Market Council, and the Expert Council under the Ministry of Digital Development are now also a thing of the past.
The businessman explains his standpoint simply – he and his fund focus on working with cross-border companies.
Short bio of Alexander Galitsky
• He was born on February 9, 1955 in Zhitomir region (Ukrainian SSR);
• In 1979, he graduated from MIET with a degree in Theoretical Physics and later defended his PhD thesis on Technical Cybernetics;
• In 1990, after another reorganization of the Microdevice Research Institute, he became CEO of the ELVIS company and later created his ELVIS+ company;
• In 2008, he became the founder of Almaz Capital.
