Alexander Galitsky

Alexander Galitsky was born in Ukraine on 9 February 1955. From his early years, the boy had an attraction to literature. Alexander’s father, however, saw that his son had a great aptitude for exact sciences, so he persuaded the young man to enroll at MIET (Moscow Institute of Electronic Technology). That decision determined his whole future life.

Later, Galitsky was the number-two person at Elas, the Soviet Union’s aerospace electronics maker. He was working on a low-orbiting satellite system for the Communist government. Back then, he proposed the unthinkable to the Soviet government — to work together with the U.S. companies in order to successfully complete the project. And, to everyone’s amazement, the government agreed.

After the meeting with the officials, Galitsky flew to Siberia for a scientific seminar. Six days later, the government in the Soviet Union changed as a result of a coup. A few days after, a new leader Boris Yeltsin emerged, proposing to lead the state to democracy. When Galitsky returned home, he lived in a new country.

Needless to say, Galitsky’s agreement with the old government was canceled. “I drank for seven days because I didn’t know what to do in the future,” he says. He had spent his life developing new technology and at that moment everything seemed to be in vain. “It was sad.” 

However, the young scientist did not let the coup stop him. At the end of 1991, he founded his own high-tech company, Electronic Computer and Information Systems (Elvis+). He went after the largest market in the world and soon was butting heads with the top U.S. companies. 

In 1991, Galitsky was astonished by the quality of projects and infrastructure he saw at Silicon Valley when he went there on a work trip. During the same period, Alexander Galitsky began working with Sun Microsystems — a U.S. IT company that, was on a par with Microsoft. Together with his team at Sun Microsystems, they worked on the first Wi-Fi technology and VPN service.

Alexander Galitsky is one of those ambitious people whose craving for development has no limits. In terms of his technological developments, he has always strived to achieve the level of Silicon Valley, an unconditional technological leader. Here is what Galitsky says about his experience of visiting Silicon Valley for the first time:

“It’s a special environment. You are surrounded by professionals and like-minded people, striving to build something new and change the world for the better. Every time I come to the Valley, it’s an energy boost and a kind of technological ‘detox’. The Valley is full of knowledge about technological problems and business challenges. Here people from all over the world are finding solutions to these problems and challenges and openly speaking about them. This atmosphere of openness is the foundation of this ecosystem.”

— Alexander Galitsky

Now 68, the managing partner of Almaz Capital VC fund works with projects from Silicon Valley and Europe. Galitsky believes that deep-tech B2B startups aiming to conquer the global market have the most potential. Initially, the fund was created with help from Cisco Systems which was looking to expand in the post-Soviet countries. Back then, Galitsky managed a number of successful startups in Russia and Eastern Europe.

By today, the venture investor has quitted all Russian projects he used to be a part of. The main reason for that is the divergence of interests: the majority of his former “mentees” have focused on the local market and refused to go global. Alexander, on the other hand, only sees perspective in working with startups aiming to become international and reach Silicon Valley.

Band of Angels

Alexander Galitsky’s path in venture capital investment includes the period of participation in the Band of Angels. Since 1994, the Band of Angels investor group has been helping startups to succeed at an early stage. The group consists of over a hundred members, mostly high-tech company executives, former or current, as well as other big VC players.

As Forbes wrote in 1997 https://www.forbes.com/asap/1997/1006/029_print.html, at that time, the Band met at different locations in Silicon Valley in order to screen the top 3 startups picked out of the monthly selection of over 50 initial applications.

The number of members and their experience were what made the Band of Angels truly unique. Apart from the seed capital investments that a startup received, it usually had a member of the Band become part of the startup’s board. Moreover, the future business got advice and guidance from the top players along with their experience and extensive contacts, which could be much more helpful than the money alone.

Being a part of such an exclusive group as the Band was also beneficial for an investor if they managed to get in. The sum required for participation was smaller for each investor, and that implied less risk while the potential profit was just as high. Normally the sums required there were much less than those needed at later stages of a startup.

During elegant dinners with champagne, cocktails, and a whole variety of exquisite dishes, the VCs used to hear the pitches of three entrepreneurs. Each presenter got 20 minutes, then the project was discussed around the table. If the deal was worthwhile, the investors would invite the entrepreneur back for a few hours of specific difficult questions.

About a third of the entrepreneurs from the dinner list received funding. As for the members of the group: a third were former VCs and another third were corporate biggies, past and present. Also, there were those without a title.

Two-thirds of the Angel startups needed more funding later on. In fact, much more than the Angels could provide. That is when the startups were turned over to the “real” VCs like Alexander Galitsky. A long time ago he was one of the members of the Band that made a lot of noise in Silicon Valley. Alexander surprised everyone when he managed to bypass the strict U.S. trade policy and paved the way to open markets. 

Back then, Galitsky took advantage of a loophole in the law: if the U.S. government forbids U.S. software companies to export encryption technology, then why not to develop the same technology somewhere abroad, strike a deal with an American company and bypass the law entirely? This is precisely what he and Sun Microsystems did over 20 years ago. Alexander strongly believed that the markets should be open and used “Power to the People!” as his motto.

Though Galitsky did not like “fighting with the U.S. government,” he did it nonetheless. Perhaps because he wasn’t afraid to. Galitsky learned from Boris Yeltsin years before that the best way to deal with bureaucracy is to confront it.

(Disclaimer: Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)