“We start every story with two Kazakh guys walked into a bar in Montana.”
That may sound like the beginning of a joke, but for Jahn Karsybaev, it was the beginning of something much greater. When he and Adil Nurgozhin met during their undergraduate studies at the University of Montana, they quickly became friends because of their shared homeland. Now, almost 20 years later, they work together as the co-founders and managing partners of Big Sky Capital, which just closed its debut fund at $20 million.
Born and raised in Kazakhstan, Karsybaev emigrated to the US in the early 2000s to study business at the University of Montana. He said he took “the easy way,” following his sister who had come a few years before as one of the first Kazakh exchange students after the fall of the Soviet Union.
Soon after he arrived, the rest of his family emigrated to South Florida. His father, an Olympic boxing coach in Kazakhstan, had been approached by the US to train American athletes.
“In the 1996 Atlanta Olympic Games one of his students took bronze and in the 2000 Sydney Olympics he took gold, so that’s how my whole family was able to come here – and we’ve been around Fort Lauderdale ever since. My dad still coaches, he’s in his mid-70s and loves coaching kids, especially immigrant children.”
A different path
Rather than follow his father into sports, Karsybaev tried his hand at entrepreneurship, teaming up with Nurgozhin. “We had quite a few companies of our own, some successful failures, and we had one exit together as angel investors,” Karsybaev said. “He went back home and I moved back to South Florida. A few years later – based on our angel track record and everything we’ve done ourselves – we decided to go the fundraising route for our own VC fund.”
Big Sky, which is based in Miami, also has offices in Astana, Kazakhstan, and Singapore, where Nurgozhin is based. Since closing its debut fund at the end of 2022, it has made a dozen early-stage investments in enterprise SaaS companies across Asia and the US.
“When we look at a potential investment the first question we ask is, ‘Can we actually help them?” Karsybaev told Venture Capital Journal. “If there’s definitely an opportunity to plug in and help out, that’s when we start moving the process forward.”
Big Sky’s debut fund employs a 2 percent management fee and 20 percent carried interest. Karsybaev said the fund “had commitments for up to $100 million,” but that he and Nurgozhin decided to limit it to $20 million because they “didn’t feel comfortable taking all of that capital right away,” citing the firm’s small team of five as not enough infrastructure to handle that much capital in a debut fund.
Given the amount of LP interest, Karsybaev feels that the firm is already in discussions to raise its second fund with a target of $75 million to $100 million once fund I is fully invested. It plans to deploy all of its capital within the next three years, with an average check size of $250,000 to $500,000.
Big Sky’s debut fund LPs are mostly high-net-worth individuals, including Renato Lima, a security engineering leader at Meta; Stephanie Quinones, a partner at law firm Gunster; and Jim Martin, head of IT at Bankers Health Group. All of the fund’s anchor LPs are Kazakhstan-based investors, including the former head of its sovereign wealth fund, according to Karsybaev.
Lima of Meta told VCJ that Karsybaev’s track record of successful companies and his experience in enterprise SaaS industry are two of the reasons he chose to invest. “Oftentimes you invest in people,” he said. “I’ve known Jahn for some time, the guy is a serial entrepreneur. He’s amazing, he always has like 10 things going on and he’s succeeding at them. He has the expertise taking his companies to the level that I see being very valuable for start-ups that need that advice and strategy.”
Karsybaev said that Big Sky plans to leverage its LPs’ expertise as part of its value-add proposition, with the goal of some LPs taking board seats at portfolio companies.
About “90 percent, maybe even more than that, of the founders we’ve backed come from very humble backgrounds; they’re immigrants like ourselves,” he said. “A lot of the companies we’ve invested in are building something overseas with the vision of expanding and coming to the US market. A few of our LPs are healthcare executives, and they’ve come in and helped some our health-tech start-ups that are building some really cool technologies overseas and trying to bring them here. I see a lot of value-add from that perspective.”
Quinones of Gunster plans to help out on the legal front. She told VCJ that start-ups rarely consider bringing in legal experts before it’s absolutely necessary, but that doing so early in the process can streamline things down the line and save money in the long term.
“A lot of these start-ups, they’re obviously short on cash and so the last thing that they’re thinking about is hiring an attorney to get their ducks in a row,” she said. “It’s a catch-22 situation because if they don’t do that, then when they raise later rounds or an exit event occurs there’s so much work to be done on the legal side. I think the idea is that we’re going to come in on the front end and have everything clean off the bat. I think that adds value but also saves a lot of money in the long run.”
Big Sky has no formal mandate to invest in immigrant founders, but Karsybaev said that it has been a part of every conversation it’s had with founders and LPs. “When we talk to them for the first time, we say, ‘Here’s our track record, here’s where we come from, but the access to capital has been very challenging,’” Karsybaev said. “It definitely resonates with the founders we talk to, and they understand the pain points.”
The timing of Big Sky’s fundraising made the process more difficult, as some LPs put holds on their commitments or backed out entirely following the fall of FTX and the state of the global economy. But ultimately, the slowdown in the venture industry has been a stroke of luck for the emerging manager.
“We’re lucky in the sense that there’s a lot of companies with traction in the market that are giving us an opportunity to come in very early with small checks,” Karsybaev said. “In 2021 and early 2022 they wouldn’t have even looked in our direction because our check size just didn’t make sense for them; they were getting term sheets for anywhere from $2 million to $5 million, but it’s been great because at the end of the day these companies have significant traction and they actually want to show that they can operate very lean.”
Big Sky’s name pays homage to where its founders met, Montana, which is known as Big Sky Country, as well as to how Karsybaev wants the founders he invests in to think about their companies.
“It’s very easy to paint some of the immediate goals and short-term vision, but when you talk to founders and you ask them, ‘If everything comes together and everything works great and you’re in an ideal state, what’s that big sky vision?’ a lot of them actually struggle telling you where they envision themselves and their company in 10 years,” he said. “I see a lot of value from funds like ours that are small and scrappy, and I know we’ll grow out of that. But to be able to build those relationships with the founders, that’s the most important emphasis at this stage.”