“This cannot be done in Romania.” “It does not apply here” – these statements were still quite prevalent at the beginning of the Investment Ready Program (IRP) Warm-Up hosted at the Hub Bucharest on 29 January. Ten ventures striving for social impact – and the funds necessary to reach it – attended the event with cautious pessimism and different agendas: validating their ideas, calibrating their business plan or even finding a mentor. As the full-day entrepreneurial workout progressed, the participants’ focus shifted from the adverse local context to the potential of their projects, leaving them with a common mindset, an action oriented one.
Vlad Andrei of startup Ikedoo Institute just discovered a neuralgic spot of his venturePessimism can be treated
While Romania might seem like a pessimist country, it does not lack good or smart ideas – the local creative industries, for instance, generated more tax money in the last years than the tourism or the transportation branches of the economy. As it tends to go for business ideas, perhaps particularly if they are driven not only by profit but also by making positive social impact, their implementation is not always easy. Often, the road from concept to profit is more like a maze than a highway.
A significant proportion of the IRP participants’ questions were gravitating around legal and accounting procedures, technicalities that in countries with a more transparent legal system could be fixed with a simple “leave it to the accountant” solution. It seems a legitimate attitude but after a direct confrontation with the often atrocious Romanian bureaucracy and the omnipresent corruption you’ll easily understand the cautious pessimism that a lot of young entrepreneurs and even local investorsshare. This attitude is not contagious, fortunately, and can be treated. Initiatives like the Investment Ready Warm-Up prove to offer efficient therapy sessions.
I met the participants after lunch, already warmed up after an intense session of presentations and applied workshops. The energy was running low for some of them, but the enthusiasm was still high. It can sometimes be hard to keep up with the Vienna team – Alexis Eremia, Cezar Neaga, Hinnerk Hansen, Lena Gansterer and Nikolaus Hutter – that guided them through the day, from scratch to pitch, helping them define and refine their ventures in order to be, as promised, “investment ready”. After warm-up events in Vienna, Zurich, Istanbul and Zagreb, the team of five looked like a band on their first world tour – energetic, demanding and determined to get the crowd in motion and in sync. The crowd, which was made up of a heterogeneous but relevant sample of some of Romania’s up-and-coming changemakers, responded.
Defining the common ground
Profiling the typical Romanian social entrepreneur might be hard, but, as the ventures’ presentations proved, some common traits can be identified. We are talking about young professionals, often with a relevant corporate or NGO background, in their early thirties or late twenties. Usually they have a strong personal motivation; they want to fix trough specific problems that they have encountered, such as the lack of proper educational tools or bad eating habits, to give you some examples.
And one more thing: “they stand their ground”, as Oana Păun, co-founder of the Hub Bucharest likes to say. They are proud, determined and collaborative. This seems like a good prerequisite to me. But is it enough? “The Warm-Up provides us with a snapshot of the local reality and talking from this experience, I think Romania is definitely ready for impact investment both in terms of investors and ventures,” the program director, Lena Gansterer, told me after the event. “It is always difficult to predict a certain field, but it seems that there is a strong focus on education in terms of social impact and potentially agriculture or food production”.
“We can afford a post-materialist approach”
As a founder, you have to tell your story over and over again, much like a traveling gospel preacher. It is a tiresome but necessary exercise – at some point, the words seem to lose their meaning and you are forced to refine your sales arguments until you reach their very essence. The process gets even more interesting if applied to already successful ventures that need to be scaled up.
Are you convinced yet? Matei Dumitrescu from Cosul de Legume is on the pitch.This was the case of Matei Dumitrescu, owner of Cosul de Legume, an organic farming and distributing venture with its products already sold in advance, and Vlad Andrei from Ikedoo Institute, a research institute specialised in experiential education. “I just discovered a neuralgic spot of our venture: the proof of market need and, yes, clearly we have to work on our sales presentation” says Vlad. “My advice for participants of the Investment Ready Program would be to go through the Customer Discovery process first.”
The most anticipated part of the day was, of course, the final presentation in front of a jury of investors. Among them were Roxana Lazar, CEO of Dexia Kommunalkredit Romania, Dragos Nicolaescu, coach and business angel, entrepreneur Marian Popa, and representatives of the United Nations Development Programme. The jury was also part of a lively presentation session and roundtable, moderated by Nikolaus Hutter. It was an admirable effort to define the terms, strategies and tactics in the impact investment field. From the words of wisdom heard at this table that would deserve to become an internet meme, I noted: “I think that we as society have accumulated a massive amount of wealth. We can afford a post-materialist approach.” Pretty hard to argue with that, don’t you think?
Insights: the 30-minute humour test
The IRP event was not a theoretical crash course, though the informational input was intense. As a realistic investor pitch simulation, one of its strong points was the contact with real investors. Christoph Prinz, founder of India Investment Club, was one of them and managed one of the highlights of the day: an applied Q&A session. Supported by Nikolaus Hutter from Toniic, an international impact investor network, he shed some light on sensitive subjects like the size of a credible entrepreneurial team or the over-optimistic projections in the business plans.
He also shared some precious insights. One was “the 30 minutes humour test”, a highly efficient evaluation tool – if you don’t get to share a laugh during the pitch with your potential partner, don’t share your funds with him. Note to self and to all entrepreneurs out there: smile more. But do be careful about what you laugh about, especially if you are handling sales!
Global or local interests?
By the end of the day, each venture had a chance of a 90-second pitch and a 90-second feedback session with the jury. The hour dedicated to the presentations was a parade of ideas, world-changing business concepts from telemedicine to software platforms that proved to be both generous and practical. Choosing between taking notes and applauding the speakers was tough. One question crossed my mind: “Are the interests that fuel the ventures global or local? Is Romania in sync with the global vibe?”
Lena, the program director, summed it up for me: “There seems to be a somewhat recurring pattern in regard to what the ventures are aiming for, indeed. Many ventures that we have come across at our Warm-Ups so far, from Zurich to Istanbul, are related to organic and healthy food and sustainable consumption and lifestyle. These issues seem to be of global interest, whereas empowering disabled people seems to be more important in the Eastern European region than elsewhere. Particularly at the Warm-Up in Bucharest, there was a focus on education, skill training and advancing innovation.”
Nikolaus Hutter and Dumitru Sirbu looking for the masterplan.The most appreciated presentations, by the jury and also by the public, were the ones that had a personal angle and motivation. Dumitru Sirbu, founder of Rently – a real estate online engine designed for students with low incomes – was one example. He found the inspiration and energy to develop his project in Bucharest when it was almost impossible for a young student to find an affordable rent offer. He succeeded in shifting this frustration into a career of working for a major real estate agency, and now into a promising startup. “During the day I felt theneed to better calibrate our product but eventually the real market is the best test. I feel more confident after the warm-up. I actually had a meeting with a real investor who agreed to support us and coach us until we reach theinvestment ready stage,” he concluded. Best of luck!
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