The IPO as a Beginning, Not an End: Viktor Manev on Rethinking Capital Formation in Central & Eastern Europe

Impetus Capital's Co-Founder and Managing Partner makes the case for small, disciplined IPOs as the missing infrastructure for growth-stage companies.

Viktor Manev has a deceptively simple observation about the European startup ecosystem: the problem is not a lack of talent or ambition — it is a missing rung on the ladder. Between a company generating €10–20 million in revenue and a full-scale IPO lies a capital gap that growth equity has never reliably filled for scaleups, and that pension funds, the natural long-term capital providers, cannot easily reach. His answer, built through Impetus Capital in Central and Eastern Europe, is to make the IPO itself the funding mechanism — not the exit.

We sat down with Manev to discuss pricing discipline, the peculiar position his fund occupies between private and public-market allocators, why pension funds are the unsung victims of late-stage overvaluation, and whether the Impetus model can travel beyond the CEE region.

Redefining the IPO: Capital Formation, Not Liquidity

The conventional story about IPOs is that they are the moment investors get their money back. You build a company, you take it public, and the public markets absorb the risk. Manev argues this framing has corrupted the incentive structure of the entire asset class.

At Impetus, the IPO is not an exit — it is a capital formation milestone. The fund backs companies at the growth, scale-up stage, takes them through a small, carefully priced public listing (typically raising €10–50 million), and remains invested as a long-term anchor shareholder after the listing. The company gets access to public capital markets and, crucially, to institutional investors who are structurally excluded from private funds. Founders retain more ownership. And the public market price, set with discipline from day one, does not need to be corrected three years later when reality catches up.

“The key variables are pricing discipline and controlled dilution,” Manev explains. “If you price a small IPO correctly — not optimistically, not to manufacture a headline valuation — the aftermarket performance takes care of itself. Investors who come in at the IPO are not immediately underwater. That builds trust, and trust builds a long-term shareholder base.”

The model is also less vulnerable to IPO market windows. Because the raises are small and the companies are near profitability at the point of listing, Impetus does not need a buoyant market to execute. A company doing €15 million in revenue with healthy margins can list in a difficult environment and still attract the right investors. The dependency on peak sentiment that plagues large-cap listings simply does not apply.

The Scaleup Growth Gap in CEE — and Who Actually Pays for It

Central and Eastern Europe has produced a generation of technically strong companies that consistently struggle to raise Series B and growth-stage rounds. The domestic venture ecosystem is too small, and international growth investors tend to focus on larger, later-stage opportunities in Western Europe or the US. The result is a region full of companies generating meaningful revenue that cannot find the capital to scale.

Manev sees this not as a flaw of the region but as a structural opportunity. “A company at €10–20 million in revenue, approaching profitability, with a defensible market position — that is not a risky bet. That is exactly the type of company that public markets were originally designed to fund. The problem is that the public markets infrastructure in CEE has never been optimized for companies of that size.” Impetus is, in effect, building that infrastructure.

One of the more provocative threads in conversation with Manev concerns pension funds. The conventional narrative positions pension funds as the solution to Europe’s growth capital shortage — unlock their allocations, and the Series B problem resolves itself. Manev accepts this, but adds an uncomfortable footnote: pension funds are also the institutions currently absorbing losses when overvalued private companies eventually reach the public markets.

“Companies that stay private too long, at valuations inflated by multiple rounds of optimistic pricing, eventually come out to the real economy. And when they do, it is the pension funds — through their public market allocations — that buy in and discover the valuation does not hold. Someone has to accept the loss. Historically, that someone is the retail investor or the institutional allocator who arrives last.” The irony is sharp: the capital source Europe most needs to grow its ecosystem is the same one being quietly penalized by its current dysfunctions.

Asset allocators are adding illiquid, one-way risk without any apparent hedging of that risk. The Impetus approach addresses this directly. By listing companies at early-stage, growth-adjusted valuations, with the fund maintaining its position post-IPO to install institutional-grade corporate governance and liquidity measures, the gap between private and public pricing is removed rather than deferred – the LP illiquid investments are hedged against their extended stay within PE portfolios.

The LP Problem: Who Invests in a Private-Public Fund?

If the Impetus model is intellectually coherent, it creates an immediate practical problem: most institutional investors are wired for either private markets or public equities. They have separate teams, separate mandates, separate return benchmarks. A fund that operates in the space between the two — backing private companies and then holding them as public shareholders — does not fit neatly into either bucket.

“Fundraising for this model is genuinely difficult,” Manev acknowledges. “When you speak to a traditional private equity LP, they understand private assets and illiquidity premiums. When you speak to a public equity allocator, they understand listed companies and liquidity. What you are offering is a deliberately hybrid exposure — you are investing in companies that will be public, held through a private fund structure, with the fund acting as a long-term corporate governance anchor. Our strategy resolves the illiquidity conundrum while unlocking alpha for the LPs. That requires an LP with a genuinely flexible mandate, or the intellectual curiosity to build one.”

The LPs who do engage tend to share a common characteristic: they think in terms of outcomes for the underlying companies rather than classification of the instrument. Family offices, certain endowments, and a small subset of institutional allocators who have grown frustrated with the binary private/public divide and the DPI drought are the natural constituency. Manev is also explicit that, as the model matures and the portfolio companies build track records as public businesses, the LP universe should expand — the listed companies themselves become a form of live evidence.

There is also a longer-term vision embedded in the structure: bringing LPs into the capitalization of portfolio companies through the public markets over time. The fund does not simply exit into the public float — it mobilizes 3x-4x additional capital on the capital markets, creating continuity of capital and alignment across the lifecycle of the business. “This is the moment when we crowd in institutional investors and make them part of the success of our companies,” adds Manev.

Beyond CEE: A Global Problem in Search of a Local Solution

Manev is building Impetus in the CEE region, but he is clear that the underlying problem is not regional. The concentration of mid-sized, growth-stage companies that are either underserved by private capital or unready for large-cap listings exists across emerging and frontier markets globally. The lack of downstream listing infrastructure for smaller companies is, if anything, a more acute problem outside of Western Europe and North America.

Asked which markets could most credibly replicate the model, Manev points to countries with deep pipelines of family-owned businesses approaching succession, strong technical talent but limited domestic growth capital, and public-market infrastructure that is underutilized relative to the size of the private sector. Latin America — Chile was mentioned in passing — is one direction. Southeast Asia is another.

“The CEE region gave us a laboratory,” Manev says. “The conditions are specific enough to make the model legible, but the underlying logic — fair pricing, long-term alignment, pension fund access — is not specific to any geography. The question is always whether the local capital market infrastructure can support it. And that is increasingly a question of ambition as much as feasibility.”

Viktor Manev is Co-Founder and Managing Partner of Impetus Capital, a growth-stage investment firm focused on Central and Eastern Europe. Impetus backs companies through small, disciplined IPOs and maintains long-term anchor positions post-listing.