Tell us a little about your background.
Like most youngsters of my generation who started business life soon after the end of communism, I too had modest beginnings. My first venture was launched in my apartment in Bucharest some 20 years ago. Today, I am better known as a serial entrepreneur and an angel investor in the technology and internet space. I founded the GECAD Group in the early 90s and have since been involved in a number of ventures. I had the first successful business exit in 2003, when I sold RAV Antivirus, a company founded in 1994, to Microsoft. At that time, this exit was significant not only for me, but also for my country. Overnight, Romania was on the global technology map and I was lucky enough to be the person who made this happen.
Following the exit of RAV, I championed the setting up of a number of businesses. The first was ‘GECAD ePayment’, which was the trendsetter for Romania’s e-commerce initiatives. This was followed by Avangate, a company, which enables digital product companies to sell their products online and effectively manage their global product distribution. Avangate has a worldwide footprint and is now headquartered in the Silicon Valley. Axigen, the fourth startup, is a state of art mail and messaging solution for small and medium businesses.
In addition to RAV, the group has also had two more significant international exits, the acquisition of GECAD ePayment by MIH/Naspersin 2010 and the more recent exit of Avangate to Francisco Partners in October 2013.
Why and when did you become an investor and how important is the financial return to you?
I became an investor in the early 90’s, soon after I graduated from university. As the first generation of young Romanians that was free from the shackles of communism, I wanted to make a mark in the commercial world. It is important to understand that in the communist days, Romania had no private enterprise. Everything was controlled by the state. So, I guess, in a way I wanted to celebrate my freedom by becoming an entrepreneur.
Like most entrepreneurs, financial returns are important to me as they provide the fuel for new investments and opportunities. Having said this, I also believe that the timing of the exit is often more important than the financial upside. Two of my recent exits were at a time when there was substantial economic downturn in the global economy. Despite this, I was able to derive substantial value for both.
Tell us about a time you failed. What made you get back on your feet?
I have had my share of failures. Unfortunately, there is no magic formula for success. Being at the right place at the right time with the right product and the right team is an entrepreneur’s dream. I have always tried to learn from my failures and my mistakes and have had no hesitation in getting back on my feet to try yet again. Entrepreneurs need to understand that failure is often an opportunity. I invested substantially in a software venture only to realise a few years later that the product was always playing ‘catch-up’ with the other more established players in the market. The management team was in denial. I decided to pull the plug and move on.
What has changed in the investing scene from your first investment until now?
There are many more entrepreneurs today as compared to when I started. There is also awareness about what is happening in the world of technology. The young Romanian entrepreneurs of today are a lot savvier than I was in my time. Further, there is an increased interest from the investing community given that the country has been able to establish itself as an originator of good ideas, technology and innovation. A number of young Romanians are settled and work in large international technology companies like Microsoft, Oracle, Google and Facebook. They now mentor their young friends back home. Also, there are professional events that are organised to promote entrepreneurship amongst fresh graduates. All this is new and did not exist back in 2003 when I had my first exit.
What do you think about the startup scene in Romania? Do you think startups should go abroad if they want success?
If you aim high, then you should think globally. If not, a local business can also be successful. It depends on the business model, productsor services sold and the market you are in. A technology startup has a lot of opportunities to grow in a global market and my advice for Romanian startups is often to try to globalise their products. Being in a more mature environment also helps in most cases to secure funding and experienced teams.
Working with other people
What kind of people do you work best with?
I usually look for individuals who are very committed to the vision and have the ability to build, lead and work with high quality teams. I rarely get involved with the day to day of any business and self-starters are my favourite people.
What do you look for when investing in a company? How important is the technology when you’re looking at a new investment opportunity?
Whereas innovation and technology are important, I believe that successful companies have the ability to understand the needs of their potential customers and develop products and services to meet them. I also see a number of startups which have great ideas but no concrete plans on how to monetise them. I strongly believe that technology, product and sales are equally important. I therefore look for companies who have the ability to achieve all three.
What’s common across your investments to date?
All my investments are in the area of technology and have good leadership. I now stay away from non-technology investments as there is very little that I can contribute in their development other than through cash injection.
What do you think is the most misunderstood thing about you?
People think that I have a magic wand that can make every venture a success. They need to understand that I can only support a good idea and a good team with my experience and past success. All the hard work needs to be done by the entrepreneurs and their teams. I can only, at best, lead the way. People also believe that I invest in everything that is related to technology. That is not true. I need to see more than just an idea to invest.
How do you spend your free time?
Outside work, music and sports are my favourite hobbies. I enjoy playing the piano and going to concerts. I also make it a point to be at as many sports fixtures as time allows. I have two young daughters and value every bit of time that I get to share with them.
Complete the sentence. Working with you means…
Being passionate about what you do and delivering only the best for your customers.
Invitation to startups
Tell us about your last investment – what attracted your attention, and what made you close the deal?
Over the last few years I have principally focused on my existing investments and have spent a lot of time in mentoring young entrepreneurs. I run a programme, in which I visit schools and universities and talk to students about entrepreneurship and the great opportunities that exist not only in Romania but also in the world. Whilst doing this, I have kept my eyes and ears open for new and interesting ventures. I am continuously on the look-out for good ideas backed by good people, products and services with a wide global appeal. Since I just exited Avangate, I am taking a bit of downtime after a very hectic few months of intense negotiations with the acquirers. I have a number of interesting opportunities that have come my way but am still undecided about what will be the next investment. I should have a better idea in a few months from now.
Do you invest in international companies?
Yes, I most definitely invest in international companies. Technology has no geographical barriers. I am open to good ideas and good teams from any part of the world.
What types of businesses are proving most popular at the moment in Romania?
I have seen a lot of interest in e-commerce, mobile apps and games. Cloud technology companies are also getting increasingly popular with Romanian entrepreneurs.
Besides providing capital, what else do you do with the companies you back?
First of all, I use my expertise, business knowledge and my business network in every startup I invest in. Then, I invest money if needed.
What would you recommend to the people who want to get you onboard?
Tell me the problem that you are trying to solve and how your product or service is going to do this. Talk about the people behind the startup and the skills that they bring to the table. Convince me that what you are going to do is going to make a difference. And: please do this in no more than 10 PowerPoint slides.
Don’t even think of getting in touch if…
All you are looking for is money. Banks are supposed to provide that!