all About Investments
Thanks for accepting our invitation, Florin! You have a remarkable experience in investment and Portfolio management... but I better let you tell us more :-)
Good question. Ten years ago I would have talked only about the financial side of it – the return, associated risk, investment type, etc.
Today, “to invest” means to me a bit more: to identify with or become part of something that, I feel, has potential not only financial but also in terms of people and teams. I love being part of projects in which there is a significant chance of changing something – an industry or community, or to educate. In fact, among my activities I do also mentoring; this is my way to return something to the society, now that I’ve accumulated few good years of experience.
When I think about investments today, I do it in a broader way: as a financial satisfaction – that will produce ROI at a certain moment, but also as the satisfaction of being directly involved in reaching the targets of a certain project. The latter part attracts me increasingly more.
I started in 1997, it was my first job. It wasn’t by chance because, by then I graduated Economic Studies and started my doctoral studies in Banking - Capital Markets, and this was the specialism that attracted me (especially “Portfolio Management”).
My first job was as stockbroker, then I moved to Rasdaq – which was quite similar to Nasdaq, where I got certified as trader. I got then a job in Banca Transilvania where I met a lot of interesting people.
Thing is that since ‘97, no single year passed by without placing an investment, most of them on the stock market, but also in other markets, including passive income investments.
My first investment in a start-up happened in 2016. It was a personal challenge that took me out of my comfort zone – I had to spend less time with my Excels, this is how much I liked the guys from Blugento. In many situations, in early startups there isn’t much to analyze when it comes to financial results, except its people. I am motivated in my decisions by driven & individuals that can present me the full, long term vision; by then I was no different.
At Transilvania Angels Network – the club I’m part of, we took over the challenge of bringing people from capital markets towards Angel investing; which is really different.
My first reason was that I wanted to become a more accomplished investor and to take upon more a role of angel investor, that presents a higher risk. The stock market risk is more contained: you analyze a lot of reports and, if something doesn’t look right, press enter and you have the money back into your account. It is not the same for Angel investments: I would actually press enter for few of them but I know nothing’s gonna happen.
The second reason is that many people in my circles welcomed my advices and I got the definite feeling that some young teams can benefit from them too, so I decided to get involved.
Today, about 30% from my portfolio is invested in start-ups. This is not something I could have anticipated 6 years ago, when I started. I had also the chance of a good start with Blugento, that proved a wise choice when they had an exit, 3 years after the investment.
I felt the need of such platform for some years, so I followed some international ones. I am registered on Seeders and Republic, and I have seen Romanian start-ups listing there too. As an investor, the fact that a company manages to get listed on SeedBlink is a proof of worthiness, growth potential, and recognition, that inspires trust. I’ve seen the piece of news announcing SeedBlink’s new partnership with BVB and I felt that this is the right direction and that it can unfold nicely. I already have 3 investments on your platform: Cyscale, Cartloop and SanoPass. SeedBlink is salutary in the ecosystem.
What inspires you in choosing the companies to invest in?
My portfolio is quite diverse. In the last 2 years I was interested a lot in the disruptive and fast growth fields. Everything I post on the social media channels of Prima Invest Capital is related to growth, in few fields of interest; it is not by chance that I invest in health tech, e.g. start-ups like Telios. I also like the genomics field and DNA sequencing – this vertical is really revolutionary. I like anything related to AI because it has the potential to optimize the processes and reduce the risks the humans can induce. I am interested in alternative energy and autonomous vehicles, too.
My portfolio is structured as much as possible around these five fields, and will be the same as long as we have local start-ups in these verticals. My investments are influenced by Cathie Wood – founder of Ark Invest, the most innovative funds on the capital market, specialized on disruptive industries. They map so well with my objectives, that I follow their activity on a daily basis and get inspired.
Pretty much all of them have an impact but if we’re referring to start-ups, I feel that Telios is such investment (in the telemedicine field). I think the idea is really revolutionary, especially for Romania. This trend started in the US few years ago and grew there quite a bit already, however in Romania is in its infancy. The impact is huge and is supported strongly by the pandemics context that just accelerated most probably, an otherwise favorable evolution.
Hmm, unexpected question. Books. For example Ekhart Tolle – A New Earth, a book that is quite heavy, which I love to re-read now and then. It is about how we live our present, how we generate conscientiously things, and also how the ego can be harmful. In terms of specialty literature I prefer podcasts instead of books. Best of Us Investors, by Kerry Grinkmeyer – is one that I listen to frequently and recommend: it is about disruptive growth.
I am currently trying to formalize the process as much as possible, because there are significantly more opportunities these days coming via my own channels, LinkedIn, website, SeedBlink and Transylvania Angels Network.
I normally start by analysing the deck, followed by a call or meeting with the team or a one-to-one; this helps me very much, maybe more than a pitch. I can see the people and feel if they are determined, have long term vision, have people in their teams that know business & strategic planning, and can sign strategic partnerships.
Next step is to analyse the opportunities that fit my time-frame and I choose 1-2 companies at each 3 months. To be able to bring more opportunities to fruition, I have diversified more and reduced the ticket size. These days I prefer to invest € 5.000-10.000 in many projects that I can “complete” with my expertise, as early as possible.
I try to organize a bit the company’s structure (as said at “Meet the Backers” event). I try to organize a Board of Advisors – formed by people with experience as business angels and in corporate governance, to make the communication with the stakeholders more transparent. The expectation of the investors is to receive information on a monthly basis, or at least quarterly.
Some founders work so hard that they don’t have the resources to cover this area; that’s why we need to organize the communication very efficiently. We don’t need a hundred page document, but a type of “keep in touch”, motivational one. If it’s smart money, then make use of it by maintaining a dynamic, interactive and permanent relationship. Such 5 pages quarterly report is extremely important and recommended even from the early stage. Investors can bring in clients and know-how. There was no project in which I couldn’t bring new clients, as a stakeholder. I appreciate a lot the stakeholders that know how to make use of me, who take advantage of all my resources and understand that we have a common interest, and that my role is to facilitate their growth.
The first advice would be to test and assess frankly their investment profile. A common mistake is that people invest in businesses that do not match their profile. It needs to be tested; you cannot become business angel overnight and you should not risk your entire capital. You cannot get exposed on an instrument that is riskier than your appetite just because some of your acquaintances do so – they probably have a different investment experience.
Also: analyze the momentum and the trend. These days it is hard to keep up the pace with the flood of opportunities, the valuation of startups is on an ascending trend, together with other active stocks & crypto. It is natural because somewhere there, in the last ten years, a lot of money were printed; this is the response, the paradigm. It is important to test and discover what is your risk appetite first, and only then to start building you portfolio.
It is really valuable to diversify based on instrument type, on business sector, and using this “My Portfolio” (implemented by SeedBlink, too); this way you can analyze and balance the directions of your investment and stay in your comfort zone. Ten years ago we had no idea we’ll ever have so many resources in our hands, but they are mundane for any investor today.
They should not base their decisions on others’. You can listen to others’ opinions, analyze, discuss them, but to click “Invest” or sign the SPV contract is your decision. You need to take upon yourself the final decision; you cannot develop if you permanently find an excuse or you blame others.
The first advice is to try to maximize the resources they already have: team, strategic partnerships, achievements, pilot projects, clients, and recurrent income, all to be able to support a credible evaluation. I am happy to see more and more start-ups that set up a Board of Advisors using people with expertise in the field, with credibility, experienced in business development, that do bring in some other people with them, as a bonus. This makes things more attractive to the investors, especially for rounds of investment over 500K euro.
Also very important is their vision, what they need financing for and what is their proposed destination. Some do not sense the importance of this, some others don’t know how to do it.
Should avoid lying or being secretive; sooner or later it will come out and it will result in a complete show stopper: you’re loosing trust and everything crumbles down. To cosmeticize for marketing purposes is somewhat understandable, but to hide stuff or to inflate numbers is completely wrong because in few years you’ll need to validate, and it will all be revealed. From my point of view such thing is completely wrong; thinking that this is needed to get a better valuation will not get you anywhere good. If you think so, you’re probably missing something.
Florin, thank you for sharing your thoughts. A final message for our readers?
Thank you for inviting me, too. My message would be that, those who feel they want to develop as an investor, should go ahead in trust, testing various methods and financial instruments, but always filtering the opportunities using their own mind, so that the final decision is theirs – a conscious one.
More about Florin POP | Prima Invest Capital | Transylvania Angels Network
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