Between the Olympics and the current unpleasantness in Ukraine, Russia's been very much in the news of late. That's also true in the startup community. From Yuri Milner's jaw-dropping bets on Facebook, to efforts to create a second Silicon Valley near Moscow, tech dollars are flowing between the two regions as though the Cold War never happened.

Sasha Galitsky is waist-deep in that flood. A former top official with the Soviet Space Agency, he became a serial entrepreneur after partnering with Sun Microsystems, then helped launch one of Russia's first venture funds. These days, he's managing partner at Menlo Park's Almaz Capital, which helps link startups and investors between the valley and the former USSR.

Q: How'd you get into this racket?

A: From 1990 until 2004, I built five high-tech companies from scratch. A few achieved remarkable technological and business success that led to acquisitions by companies such as Sun Microsystems. One was a complete disaster. It was at the beginning of 2000, and everything that could go wrong went wrong: The Internet bubble, strange board decisions and a bad location choice for headquarters.

I was so disappointed that when another idea came to mind, I decided it was time to hire management, invest my own money and do everything right. I realized that I could help by investing in other people's ideas; my entrepreneurial scars had value. Index Ventures and Wellington Partners were among the many VCs that started to call me to do due diligence around their investment opportunities.


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I started my journey in the venture world with an idea to build a new type of venture firm, which would identify and fund cool tech companies in small and not yet mature markets looking to reach global scale. Russia and the Commonwealth of Independent States (CIS) was the place to start.

Q: What do you like about VC?

A: You know, when you're in the third decade of your professional life, you need not only get joy from your work, but also an energy source to allow you to grow. Smart, motivated and crazy entrepreneurs who are initiating new ventures with an aim to change the world are a great source of this energy.

I also remember that a venture firm is just a service company, even though some VCs try to pretend they are the visionaries or are creating industries. We are generalists in many tech fields, and yes, we are trying to predict the next wave, but we rely on smart entrepreneurs to lead the way.

Q: What kinds of pitches are you looking for now?

A: We are an early-stage venture firm and are always on the hunt for something fresh, new and disruptive. We don't limit ourselves to a specific field. And we are lucky, since the entire IT industry is shifting right now, challenged by total mobility, cloud computing and big data.

I expect a new innovation wave. It requires rethinking almost every element of the modern IT ecosystem: Computing in memory, virtual storage and networking, security and privacy, etc. The past few years brought us into a completely different world in comparison to that of even five years ago. Thus, we need to keep our eyes wide open and find outstanding teams that have great technology.

Q: What's the biggest mistake entrepreneurs make?

A: Hiring the wrong people is often the No. 1 mistake. That competes with the mistake of putting customer, product and business validation last.

Q: What's the next big thing going to be?

A: "Cheap" cloud and device prototyping dramatically reduce the cost to start almost any software or hardware business today. I believe that wearables and the Internet of everything will once again turn the wheel of innovation, and it will require the introduction of new products in almost every IT discipline.

Q: It seems there are an increasing number of ties between Silicon Valley and Russia. What do the two regions have to teach each other?

A: The Internet made obsolete any border for talent, ideas and money. Only political borders remain. Everyone will agree that Russian/CIS engineers and scientists are some of the best available, thanks to a strong undergraduate education system in math, natural sciences and engineering. But turning a prototype into a product or service, and then into a business, is the biggest strength of Silicon Valley. It's why we built Almaz as the "bridge" venture fund -- linking Russian/CIS engineering talents with the product and business experience of Silicon Valley.

Q: Should the valley be nervous about the current political relationship between Washington and Moscow?

A: Any political action that could bring a threat to people's lives is completely unacceptable. I believe that politicians must, and will, find the correct solution to resolve the issues between the two countries, and I hope that this political tension will not stay too long.

The good news is that venture is a long-term business with a horizon of at least 10 to 12 years, a much longer life span than modern political crises.