By the end of last year, Information Technology (IT) investors lost confidence in the quick recovery of the U.S. economy and started withdrawing their capital from the stock market. This lack of enthusiasm was recently manifested in the tech heavy NASDAQ composite that hit a two-year low.

The disaster on Wall Street, however, is a major victory for others. Namely, the emerging markets, where investors' money has been redirected. This is because, although more risky, the emerging markets are currently also offering more chances for high returns.

While Bulgaria is not anywhere close to the top of the list of the rapidly growing emerging markets, the change in the mood of global investors has had an impact. One sign of this influence has been the recent establishment of an investment company aimed at the Bulgarian software market, Bulventures JSC.

Bulventures was formed last November by a group of London-based investors. Among the most prominent backers of the company are Stewart Till, Nikolay Vassilev from Lazard Capital Markets and Prince Kyril of Saxe-Coburg-Gotha.

The company has a very ambitious goal - to earn money from Bulgarian software start-ups. As Nikolay Nikolov, chief executive officer put it, "we want to invest in people that posses entrepreneurial spirit, technical expertise, and good ideas."

Bulventures and its financial backers have been consistent in pursuing this philosophy. They have already implemented it in their own company. The operations of Bulventures have been entrusted to a group of young graduates of the American University in Bulgaria - Nikolov, Daniel Tomov, Angel Nikolov and Stanimira Hristova.

The goal of Bulventures is to establish a portfolio of at least 10 companies. The areas of interest include, web development, databases, intelligent Internet solutions, and interactive TV solutions. So far, the company has announced one investment - AdVenture Ltd, a company specialising in interactive multimedia, video and sound production, 3D graphics, print advertising, as well as flash animation and web design.

Bulventures sees increasing domestic demand for software products. "Big corporations have discovered Bulgaria lately," said Nikolov. "Even if they arrive with ready software products, these still need fine tuning. For example, human resource software needs adjustment to the local Labour Code."

The company has not limited themselves to the domestic market, though. One of their goals is to market the products and services of their portfolio abroad. "The companies that we want to invest in must have a presence on the domestic market because they need to form a strong portfolio. Then we would proceed to market their products and services on foreign markets," said Nikolov.

Bulventures' investment strategy involves the acquisition of minority stakes. "The low income level in Bulgaria has created a brain drain situation. In order to prevent its impact, we have decided that it would be appropriate to allow management a controlling stake. Thus, they would be very much involved with their company," explained Nikolov.

The management of Bulventures has set a very ambitious financial goal for themselves. "Our target is to achieve 20 per cent return on investments anually, over a period of five years," said Nikolov. With nearly $5 million planned for investment in the Bulgarian software market, they have their work cut out for them.