Invest where you see things that matter to you!
We enjoy seeing a start-up develop, encompass more of the world and enrich the world.
Ciprian Man, Co-Founder & Angels Keeper at Growceanu, is sharing inspirational ideas, stories and advice about angel investment, start-ups, entrepreneurship, innovation and success.
Keep reading, for his take on what is meaningful about being an angel investor, what makes a good investment portfolio, what the signs of a start-up with a good future are, what the key to the relationship between an investor and an entrepreneur is, what the 3 things start-up founders should know are, and so much more!
What magnifies your spirit?
A sense of expansion, growth, development, and extended awareness – which I think applies to everyone. When it comes to angel investment, it’s the sense that you are contributing to something that is showing signs of growth, and will continue to grow, which taps into our human need for expansion. We enjoy expanding our awareness, and therefore we enjoy seeing a start-up develop, encompass more of the world, and enrich the world.
What is meaningful about being a Growceanu investor?
As a business angel, you are more than a financial investor. You are contributing to a start-up’s life and development, which is meaningful to investors. It’s an extra-layer that makes investing an actual activity, because it involves real people, and you are doing real stuff. Of course, you can take on as much of it as you want or you can give as much to it as you want, but the point is for business angels to be involved whenever it’s relevant – sometimes it might just be helping the entrepreneur with one’s network, other times it could be a little workshop, or support with product development, or product-market fit, or working with other investors. So, it’s an actual activity that you can make meaningful for yourself, for the start-up, and for the rest of the group as well - since we are all investing together.
You are a part of this community of people who have similar goals. You are making a difference while learning and exchanging ideas with like-minded people.
What do you enjoy most about it?
There’s a lot of things that are nice. One of the best feelings is when you see a start-up that you’ve known, maybe even before they were founded, as they grow, evolve, and more and more people join. You get this feeling like: I’ve known these kids for a long time. I was there when none of us had a clear idea of where this was going, before they pivoted twice. It’s a very nice feeling! You can take pride in it and enjoy it alongside a few others with whom you shared this experience – a few other angels, usually.
How would people ideally respond when you tell them about Growceanu?
Our name makes people smile, due to the reference to the Romanian fairy tale and the implied movement from greu (difficult) to grow – which is a fun analogy. We used to be an angel group. Now, Growceanu is, in fact, a platform where many angels can join up, access information, work with start-ups and deliberate together in the due diligence process, and then contribute to the start-up’s development. In fact, an angel investor’s contribution starts in the pitching session, when investors ask questions that help start-ups become aware of things they may have not considered, which is when founders get the chance to prove that they can execute well enough, that the issues brought up by the investors will be mitigated or addressed.
What is the difference between an angel group and a platform?
An angel investment platform is similar, in many ways, to an angel group – in that it’s about business angel investment, where investors get involved from the pitching session through to exit.
The difference comes from the word platform,which groups are not. We started as an angel group, but we have developed a platform that makes it extremely easy for investors to focus on what really matters, on what only they can do: the due diligence process, the interaction with other investors, the interaction with the start-up.
Growceanu has digitized the investment process by developing an app that makes administrative procedures a breeze. Our investors don’t waste time and energy on menial tasks, on administration and transactional interactions!
The Growceanu platform makes things easy for an investor. Apart from that, what is exciting, what is the value in being part of the Growceanu investor team?
First, it’s the opportunity of making the investment, of course.
But we have really thought a lot about this lately, about what motivates us to be making these investments and be part of the story. And we realized that it’s also getting involved with other investors, the fact that you’re constantly learning from them, the fact that you feel you are a part of this community of people who have similar goals, and that you are making a difference while learning and exchanging ideas with like-minded people on some very concrete topics.
I mean, I enjoy an academic argument or whatever flight of fancy. However, working on a real problem and asking questions about a real start-up and a real business is at least as engaging! I mean, it is important that the conversation is not about some fancy story, that it is very real, it’s about a business and the way it’s developing, and where it’s going, about its impact and results and how it will make the life of its customers, its team, and – why not - its investors, richer and better.
Our investors come from very different backgrounds.
What skills does a Growceanu investor need in order to perform?
First, an investor must have skin in the game. An investment platform is primarily for people who have more than, say, 40,000 EUR budget to invest in start-ups, overall. This isn’t a skill, but an important requirement for a business angel.
Apart from that, you don’t necessarily need very specific skills that you can’t learn quite quickly. An investor needs to understand how things work in the world of business – which usually comes from their business background. Of course, the more specific your particular set of skills is, the more useful you will be for some start-ups. So, if you come from healthcare, FinTech, PropTech, marketing, you will have some inside knowledge on that - which is great because many of us don’t, so we will look to you for guidance and for expertise. Also, you will know other experts in that field, with skills that might be more specific than yours, which will add value to the work we do together.
Our investors come from very different backgrounds, all of which are very useful in specific situations and less useful in others - which is when we lean back on our general knowledge about conducting business, as well as learn a few additional skills (such as how to read into a pitch deck, what the key questions are, how to look into P&Ls and balance sheets -even if you don’t like it, you need to get an idea about it). Some of our investors are very versatile and they can take start-ups through questions only inside of an Excel sheet.They have very in-depth knowledge of that, and they get very good information from Excel data, which helps us all.
What’s a good investment portfolio? How does an investor go about it?
A good portfolio is one that is balanced for you.
You do start with some general guidelines. Balanced means that, even if you’re a risk taker, you probably don’t want to put most of your wealth in risky assets. You want to create a portfolio that includes real estate, maybe some bonds and index funds, and then some shares and things that are a little more volatile and riskier, then allocate anywhere between 5-20% of that portfolio to riskier investments - such as early-stage start-ups.
And, of course, the best way we know to de-risk that part of your portfolio is to be involved, give the entrepreneurs your support, because that’s the thing they need the most when they’re in their early stage. Lacking that, they don’t have the financial strength, they don’t have the network and the resources to access the kind of support you could give them. This is a key part of being an angel.
What are the values that make one perform as an investor?
For me, when investing, it’s often a question of substance. Invest where you see the things that matter to you are manifested or present in the founder or the start-up team – as people, as entrepreneurs – and in the business itself, of course. It’s nice to see a business that adds value to other businesses, to large or small companies. But if it’s also impactful in this more modern sense of sustainability or it relieves people from chores and time wasting practices, if it improves health and protects the environment – that’s also a value that motivates me and, I think, many of the people around me.
Invest where you see the things that matter to you.
What piece of advice would you give to your old self – back when you were just thinking about starting Growceanu?
That’s hard to say, because if you change one thing, then everything else might end up being different in a better or in a not so good way.
One thing that we, the whole team, would probably have preferred is that we moved faster in terms of execution. We moved very quickly in terms of learning, but then we took a long time to reach the point where we can now really deliver, as a team, on the platform that we have built.
As an investment group, we learned quickly, we adapted, we created a series of processes that worked. But we always had the feeling that we should go further and develop this platform. And then we decided to do it, but took quite a long time to figure out how.
The lesson is that we would have liked,looking back, to move faster, to get more involved, sooner, and to extend the team. Whether it still would have taken us a long time because it maybe wasn’t the right moment for it, we don’t know. Timing is everything, after all.
You’ve been working with start-ups for quite a while. What do you see most often? What are their challenges, what do they do well, what advice do you find yourself giving founders most often?
It used to be the problem of an engineering focus, where founders really focused on the product and believed they had a perfect idea of what that product should be. So, I advised them most about product-market fit – which still is very important and will always be.
But I think what keeps coming up is the need for entrepreneurs to understand the market they are addressing. As an entrepreneur, you need to make sure that you score the lowest hanging fruit as soon as possible, in order to have traction. This way, in your first round,you can show investors that you’ve already achieved some of the things you set out to do; and in your second or later round, you show that you’re able to execute the strategy you proposed.
If you must pivot, then inform your investors, explain why you are pivoting and show how you’re going to get results. Manage expectations, and, in a very honest way, address market needs and go after them,even if you need to change gears or change direction. But keep people informed on what’s going on.
Why is understanding the market a challenge?
It’s always best to not try and guess what the market wants, but to hypothesize and test. Of course, everyone is trying to quantify results and measure their activity. When it comes to start-ups, when you have an idea of what might work better (maybe a potential customer makes a suggestion), it’s important to implement a new change that you can test, and then continue to invest in that direction only when the feedback is positive. This is the A-B testing principle: keep the status quo and try something new, measure the two results, see what’s better, and keep iterating.
What are 3 things you’d like to tell start-up founders?
Team complementarity, just good enough MVP, constantly iterate towards product-market fit. And, of course, because we’re angels, use your angels. That’s four things, but why not give them a bonus?
What are some myths of success and failure? What do people get wrong about success and about failure?
Successful people have, generally, been unsuccessful several times. The best entrepreneurs we have seen and have worked with are people who have tried in the past, who have had entrepreneurial failures in the past, often on top of a successful, but perhaps not very exciting business. As it often happens in Romania, many people have a successful outsourcing company that works (such as small studio, a larger software company etc.), and they try to use the surplus money that they make from that not just to build a house and do what they feel they need to do for themselves (which is important, because you need that comfort up to a certain point), but to also create an entrepreneurial venture. And they often fail, maybe several times.
Bogdan Nicoară, Founder & CEO of BrightSpaces, our first investment, realized at some point that he had not been investing in the right idea, even though learning how to build a business had prepped him to bean excellent entrepreneur. So, he decided not to come up with an idea himself, but instead to look for what is needed out there. He took part in the PropTech Hackathon, where one of the large sponsors came up with a story of something that they needed, but they couldn’t find it anywhere. So, these guys, because they’re so small, so agile, and so good, came up with a functioning prototype, in less than a day. That was very impressive! Of course, they later pivoted a couple of times from that very impressive prototype, they took part in accelerators, they went to PiLabs in London, they did all kinds of stuff. But now they have successfully completed their second round and they’ve grown a lot. As for Bogdan, literally as soon as he set up Bright Spaces, he started writing a document to describe his path to becoming a unicorn. We expect that he’s going to stay the course.
Use your angels!
How do you recognize a start-up with a good future, what are the signs?
The general signs are quite well-known and predictable – you need to get traction, hit your KPI objectives -if you don’t, you must ask the right questions and change course as quickly as possible and ask for advice from people who have a lot more experience (in this case, your business angels).
But I think a really good indicator is also something that you can feel: it’s the mindset of the start-up founders and their extended team.
Now, of course we don’t assess this mindset in a vacuum – for instance if founders are not happy because they don’t see results, then of course this would be a source for concern. But if they address those concerns together, if they show the team that they are addressing those concerns, and therefore eventually turn everyone’s spirits around, that is a very clear indicator that the team and the start-up are on the right track.
So, keep things transparent so that everybody knows how things are going, and keep your team inspired and motivated!
Everything entrepreneurs do takes a lot of courage!
What makes the relationship between an investor and a founder work?
Transparency and active collaboration. Entrepreneurs should keep their investors informed on how things are going, and they should ask for help whenever they need it.
In terms of transparency, we, Growceanu investors, ask entrepreneurs to report back to us in a standardized template that takes minutes to fill in - where they report on achievements, highlights, lowlights, KPIs, a very short list of numbers that we regularly review. This is about tracking performance and raising flags if there is an issue, so we can jump in.
A key piece of information we require is ‘Asks’ – where the entrepreneur tells us what the current challenges are and asks for support with whatever it may be. Angels are knowledgeable and well-connected: they can easily jump in and address a big need, sometimes providing something extremely valuable with very little effort.
When entrepreneurs ask for help, this communication makes it easy for both sides to identify what’s needed and whether investors can contribute. Often, entrepreneurs have great expertise and connections right in their backyard, amongst their own investors, but they don’t know about it if they don’t ask. As soon as they ask, I can jump and help.
What would you say to young entrepreneurs? What don’t they know and may find inspiring?
We would really like to see many more people become entrepreneurs.
The potential is enormous for young people, many of whom aren’t sure that getting a job in, not so much the public sector anymore, but in a multinational company, is how they want to live their lives. So, the entrepreneurial path is an option for them, it’s something they should always consider, even if they first take a more traditional kind of job to gain experience. Of course, this is not to say there’s anything wrong with multinationals - some of them are very exciting places to be, and definitely great places to learn.
And then, for someone with more experience, the entrepreneurial path is a wonderful way to grow, even if at first maybe they don’t dare to make the move, probably because they don’t know what it’s like to be an entrepreneur. The first step to take is to start getting involved - start talking to people,read the Innovation Labs website (or look up other pre-accelerating programs), talk to friends and family and co-workers about ideas you may have. Perhaps even more importantly, look for what’s needed – even inside a large company you can identify things the company doesn’t want to do, because it may be too risky or it’s too far from the core business (they have to make choices like that all the time). See if that may be an opportunity for you! Then, in your spare time, start thinking about developing that idea and about turning it into an entrepreneurial venture.
What is the most courageous start-up you’ve invested in?
It’s hard to say, because I think they’re all courageous. Some start-ups are in more predictable fields, that’s true, but everything entrepreneurs do takes a lot of courage!
However,if by courageous we mean off the beaten track completely and really out there,then I would have to mention a small project called Quarks Interactive, which was created by a bunch of quantum scientists led by one Romanian PhD at the University of Durham in the UK,Laurențiu Niță, who has been studying quantum physics. They have developed this quantum game, called Quantum Odyssey, where anybody can, reasonably easily, learn to program a quantum computer with no coding skills whatsoever, just by solving puzzles that use qubits (you get to learn a bit about regular computer bits and quantum qubits, too!).
Quarks Interactive has made a lot of progress, IBM really likes them, and they ported the game output to Qiskit (IBM’s quantum computing programming language). So now, you can solve the puzzle and then once you’ve created this problem-solving puzzle, the game generates actual code that can be executed by IBM’s quantum computer.
This is about quantum computing, but it’s also about quantum literacy and education, because we have a terrible shortage of specialists in this field. We don’t really have useful quantum computers yet, but they’re evolving very rapidly, and their potential is to revolutionize and disrupt everything. Security, as we know it, won’t be the same, anything to do with predictions will be far easier to achieve etc. Quantum computing is part of our future, and nobody’s addressing that we don’t have people for it, except for this little start-up.
What do you think about the Romanian start-up ecosystem?
In a nutshell, its potential is very much underutilized.
The potential shows in the fact that the Romanian ecosystem is growing at a faster rate than the rest of Europe - which is also growing fast. Of course, given the current international circumstances, we don’t know where things are going to go, but what we see is a continuing strong dynamic. The numbers show that the Romanian ecosystem is far too small for a country of this size, and certainly for a country of so many tech specialists.
So, the potential is huge for Europe, and certainly for Romania - which is, on a proportional basis, far behind even its neighboring countries. This makes our work as angel investors all the more relevant!
Start-up people need to address their social mission also.
What about the social impact start-ups have and how do people need to consider that - both as investors, as well as entrepreneurs?
Start-ups are quite special animals - in that they are small companies, but they aim to become very large very fast. So,sooner rather than later, they will have to ask themselves some important existential questions about their impact.
We have all seen start-ups whose business is sometimes disruptive, and we’ve seen how it’s perceived negatively (for instance social media or search advertising –which have become, in some people’s eyes, too large), and these are issues we really need to address.
I think start-up people in general need to address their social mission very soon after their initial success at the latest. Since start-ups are, by definition, more flexible, they should be able to cover more ground quickly, in terms of their social mission.
I think tech start-ups have a natural social role and are the aggregation of our collective intelligence - something which is naturally going to be disruptive. They fundamentally change things, so one of the things that transpires over time is that through tech start-ups we discover more and more of ourselves, collectively - even if in the first instance the impact might be perceived negatively or might actually be negative. Facebook is an example – its nature is to demand more and more attention and play on people’s attention, play on people’s basic instincts and unconscious reactions. The longer-term effect, however, is that we become aware of our triggers and mechanisms, so, in a sense, we find ourselves.
Whatever gets you in a state of flow will enhance you as a human being and will improve your professional performance!
How do you keep your thinking fresh?
By having access to information and knowledge and things of that nature, of course. But the state of being fresh, of feeling well or better in oneself I think comes a lot more through managing how I’m feeling – through meditation, attention management, by consciously reducing the time spent in a very triggering environment (social media, colorful flashing screens etc.). I take time away from distractions and constant activity.
How important is a hobby for one’s performance?
Whatever you’re passionate about is meaningful, so spending time there puts you more easily and naturally in a state of flow – which is great, because it charges you up with energy, it makes you feel better, and it improves your awareness, your ability to take in information and process it.
So,anything that brings a state of flow is great – whether it’s chemical (a glass of wine or a cup of coffee, for some people, or an Ayahuasca retreat in Peru), or if it’s an activity (such as meditation or exercise). A lot of people do fitness and that’s extremely valuable for them. I tried but it doesn’t ‘fit’ me very well. Running is also wonderful for some - I’ve seen people who are elated after running and it really charges up their whole day. So, whatever gets you in a state of flow will enhance you as a human being and will improve your professional performance!