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Investor Profile: Interview with Mălin Ștefănescu – president of TechAngels

Mălin Ștefănescu – the president of TechAngels – talks about the Romanian ecosystem of start-ups, the role of a business angel and the benefits of mentoring.

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SB: What was the moment in your career that made you consider yourself a business angel?

MS: It was not a moment in my career. It was the moment I attended one of the first HowtoWeb editions, in 2011, and I liked what I saw there, I liked the vibe, and I started getting informed about the domain.

SB: Why don't you invest in Bulgaria?

MS: I have nothing against the idea of investing in Bulgaria, but I am not very active in looking for start-ups there. TechAngels is part of a group called Business Angels Europe, that includes also Bulgaria, and one of their initiatives is to help business angels associations from a country, invest in start-ups initiated in their home country and also expand regionally, including the country where the respective business angels group is located. On the other hand, I have two investments outside Romania, one of them without Romanian DNA.

SB: How does the Romanian ecosystem of start-ups look like compared to the region?

MS: Quite similar. In terms of capital stock funds, we have moved slower than the Poles, Czechs, Hungarians and even the Bulgarians, but things are quite similar nowadays. We are still not comparing ourselves with the Poles who have many more funds than us, but we are well, and we’re growing.

SB: In how many start-ups have you invested in Romania?

MS: In Romania, I think we have invested in 8 start-ups: Green Horse Games, SmartDreamers, InnerTrends (as part of MVP Angels Fund), SymphoPay, TypingDNA (a start-up with Romanian DNA starting from Oradea but currently incorporated in the USA), Tokinomo, Critique Games, and more recently, Amsimcel and Machinations, that is in the process of closing.

SB: Which is, in general, the missing ingredient of start-ups in Romania?

MS: I think that start-ups in Romania are rather well consolidated in the product and technical area, and usually need more resources in the business area – sales and marketing. I reckon this could be the common characteristic.

SB: In your opinion, is there a need for more investment funds in Romania?

MS: I think the start-ups system is one of the few economic systems where more money are justified.

SB: What should Romania do to attract more investment funds?

MS: It should create the supporting framework for having more successful start-ups, and one of the needed ingredients is financing in the initial stage, i.e. business angels and crowdfunding platforms.

SB: Do you think that entrepreneurial education in Romania should be addressed similarly to a business model?

MS: Absolutely. Mainly because there is a tendency to demonize the capital and the entrepreneurs in Romania.

SB: How did the current crisis impact your work?

MS: From a personal perspective, I manage to spend more time with my wife and children. EEU Software, the first company founded by me, that is 20 years old now, is also well; we’re discussing new projects and just signed with a large client these days.

SB: What about your activity as part of TechAngels?

MS: From the point of view of TechAngels, things are actually better than expected. At the beginning of the crisis we had discussions about whether it would make more sense to meet less often, considering that the appetite for investments might be lower during the period we are going through.

The business angels from the group have proposed the opposite: let's talk more often, help the start-ups we have already invested in, look for other start-ups, and be even more active than before. So, if we used to meet once a month before, now we meet weekly.

SB: There is a debate in this area, on how Europe can replicate the Silicon Valley model. What is your opinion? Do you consider it possible or not, and why?

MS: I think we are all trying to replicate the Silicon Valley system because it has not yet been reinvented or changed substantially by anyone. The huge cultural differences are twofold. On one hand, the amount of money there, is much bigger; on the other hand, in the US, a fund has problems if it fails to invest in champions whilst in Europe, a fund has issues only if it invests in firms that die. So, you won't get a 'no' from a US fund but at most, a delay. In Europe, the funds try to cover themselves with all sorts of supporting evidence.

However, in Romania, things are good from this point of view. I reckon that the funds that are currently active here, have a much more open attitude than the other European funds; they are looking for champions, taking risks. I think we are lucky!

SB: It is clear that there is a very close relationship between this trio: mentor — angel investor — founder. What do you think about mentoring?

MS: I think it is important, in the sense that it must be done in good faith and in a wish to help both the start-up and the founders.

However, the founders must decide what information is useful or not, from what they receive. Mentoring is very beneficial but clearly, whoever takes on this role, must have a lot of experience and knowledge in the field. This outlines a form of quick, practical learning.

By Bianca Iulia Simion

PublishedFebruary 24, 2021


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