Lumus team chatted with Daniela Aldescu, Executive Director at Romanian Investor Relations Association, Vice President & Co-founder of VERTIK ROMANIA, angel investor and Partner & Co-founder of Smart Impact Capital. 💡
How did you get into Angel investing?
I have been in this world of “investors” since university when I had my first interaction with investments and started working as Investor Relations Officer for one of the most important listed companies in Romania. So, basically, I started this journey as a professional dealing with investors, communicating with them, presenting the company ‘s story and convincing them why the company that I was working for is an interesting investment opportunity. After a while, I started investing myself also in listed companies, building a portfolio.
Then I realized that I want to do more to support basically “the next generation of listed companies”. As my work experience was mostly in the capital market, specifically in the investor relations area, I started investigating how I can support this next generation of listed company with the knowledge that I have. I was curious about how the smallest companies, the entrepreneurial ones attract investments and how they relate and connect with investors. So, I said that the best way to achieve this is to share my experience and expertise in investor relations also with entrepreneurs and companies in their early stages, both as mentor, joining the local accelerators and as investor.
I looked a bit into the Romanian start-up ecosystem to try to understand more and I got in touch with Matei Dumitrescu, one of the most experienced and well-known Romanian angel investors. I told him that I would like to be involved in the start-ups ecosystem and share my knowledge, work with him in the accelerators he was developing and basically in this way to get to know this ecosystem better. He was very open to having more people joining him and supporting the startups with this perspective of how to deal with investors. I have to say that things are a bit different than in the case of listed companies in terms of dealing with investors.
And basically this is how I started investing in start-ups. After having a first flavor of the start-ups ecosystem, I decided that I would also like to start investing in startups, mainly in those where I see the potential in solving social and real-world problems associated with the environment. Truth to be said for me personally investing in start-ups is about “wanting to do a little good, a positive chance, making a little money, and having a little fun”
And my journey of investing in start-ups began 2 years ago, taking my first investment decision precisely when all this crazy period with Covid -19 started. I am still experiencing and learning. I am quite lucky that I started this journey by investing through Smart Impact Capital, a micro-VC founded by 11 professionals with different backgrounds and experiences. We consider it is safe to invest as micro VC because not all of us are experts in evaluating the potential of the particular startup as a whole. We have different experiences in the start-up investment ecosystem and we complement each other to support the start-ups in all stages, starting from acceleration to preparation for series A.
What were the first startups that you invested in?
The first startup that we invested in (as micro VC) was Sanopass, which is the largest optimization platform of medical services offered to employees. It also operates in Romania and Moldova, and they have great plans to expand. It is very interesting for me how it all started as I found out about this start-up from medical tech, from my usual network as one of the co-founders is my highschool colleague. He saw that I was posting in social media articles about start-ups and my involvement in local accelerators and approached me to have a discussion about his start-up. Their idea and plans caught my and my colleagues' attention and this is how it all started.
What convinced me personally was the idea – I read more about it on facebook and afterwards I met both founders and I felt that chemistry, I believed in the problem that they identified and also that they can deliver what they put as strategy.
If you could compare syndicate versus individual investment, is there some difference in your opinion, or how would you compare these?
For me personally, it was great to start investing in stars-ups together with other people, as a VC. Currently, I am open to investing considering both options and actually I am doing this.
Depending on the stage of the start-up, for them syndicates offer a quick, clean way to raise capital and connect the start-up with a large network of backers who have varied backgrounds and expertise, without dealing with them one-on-one as investors.
In terms of how I look at an opportunity depending on the way I choose to invest, I'm basically looking at the same things. I'm looking at the team or the determination of the team, their experience, and how I perceive their potential to lead and deliver. What do they promise, or what is their determination in being involved. It's okay if they will not deliver everything promised and change the strategy over time because they are a startup after all. It's also important for them to be able to understand the feedback that they receive from mentors, advisors, or the communities. And perhaps they will change their perspective a bit and continue in a slightly different direction.
So sometimes it may happen that I believe in that particular startup and introduce it to my colleagues, and not all of them will be convinced to invest. And maybe we'll decide not to invest as a syndicate, but if I believe in the founder, then I will invest individually.
How close or how active do you work with the founders once you invest?
It depends. For example SanoPass they engage a lot with the advisors, their investors, have meetings and discussions. It really depends on the actual kind of need of the startup. We as a micro-VC try to stay close to our investment, to promote them, to understand their needs and identify together how we can support, we are having quarterly meetings with updates to see if they are on track with the strategy.
Not all of us from the Syndicate are always involved. It depends on current startup needs. If startups need help from e.g., marketing and sales, someone experienced in this industry will be more involved.
For example, with the startup that I invested in individually, I have twice per month calls or update reports. Sometimes we brainstorm together on certain operational aspects. When I decide to invest individually, usually the startups are at the very beginning of their journey and it is important to have weekly or monthly status updates and discussions about how I can get more involved in the needs of the startup. I don't want to be just an investor, but an investor who helps them achieve what they planned.
It works both ways; as for the startups, it is better to have advisors or people who will be there to discuss and brainstorm, provide some tips and ideas, connect them with other stakeholders, etc and for the investor to be another guarantee that things are happening. Overall, I consider it represents mutual benefits for both parties.
Do you have any story you would like to share when things didn't go as expected, but you have learned an important lesson?
Until this moment, things were somehow on track. Sometimes it isn't easy when you go with the micro-VS. Mostly because of the way we are organized. We're 11 people who need to decide, and sometimes not everyone believes in that particular idea. Sometimes it's frustrating because you could help more startups when you invest as a Syndicate than just doing it individually.
But our experience with all the founders from our portfolio was always very good. We had the opportunity to choose the best startups from the market, considering that we are just scouting them from the accelerators. And we can see how they looked at the beginning and how much they developed.
You said that sometimes it's difficult to invest as a syndicate. When you like the idea, but some of your colleagues don't, how do you convince them if you like the startup? How do you make the decision then?
If some of my colleagues are not convinced, one important aspect is to have the opportunity to engage more with the founders, to better understand the start-up and its objectives. Nevertheless, from my point of view, it is not always a good idea to find ways to convince myself or pursue my other colleagues because, in the end, in the start-up ecosystem, in many cases the decision rests also on feeling. And we can not all have the same perception and feeling about a business, about a problem that the respective start-up tries to solve, about their founders.
Also, we can anytime invest separately if we don't agree to invest as a syndicate. So, the process is easy from this perspective.
Nevertheless, it is clear that it's a pity to not go as a syndicate as we may have gone with a higher investment amount or we may have shared the risk, diversify our portfolio. If we go separately, or at least I go, the invested amount will not be as high as it would be in the case of investing as a syndicate. If that happens, sometimes I and the respective start-up need to find another angel investor or Micro VC that wants to invest with you in that idea. So, the process will take more time in the end.
In terms of CEE, are you only looking at the startups in Romania, or are you looking at a wider region? And how do you see this region? What are the trends or sectors?
Until now, we were mostly looking at the Romanian market and only sometimes in CEE. I can say that we did not have so many startups from the CEE that we looked at. Our philosophy and the objectives since we were established were focused on investing in new startups from the CEE regions that have an impact on the environment. We also consider sustainability as an important factor when we look at the investments. We see a good trend in the industries like technology and medical industry with a component of digitalization.
It was easier for us at this moment to focus on the Romanian market because here, we are partnering with accelerators, and we have a very good pipeline. The next step will be trying to better understand the CEE region and how we can get in touch or find out more opportunities.
In conclusion, what would you advise other women who are deciding whether to make their first angel investment or maybe hesitate to start with the Angel investing at all?
It is a fact that the next generation companies, the ones that will define the future, are born via the symbiosis of founders and the VCs, investors backing them. More diversity in both the investors and founders’ communities will inevitably lead to new ways of thinking, more approaches to problems, more innovative solutions. So, I encourage women to make a step forward in this ecosystem as well. I am also involved in a think tank - VERTIK, founded at the initiative of one of the most prominent woman from the capital market - Daniela Șerban, an organization that encourages women to take the lead in entrepreneurship, investments, and politics, that offers mentoring opportunities for women. For me diversity is key in generating ground-breaking ideas. How we achieve it - is difficult to answer, however all stakeholders should be on the page and understand the opportunities lost because of this “non-diversity”.
In terms of my advice - I highly encourage any investor to have a philosophy regarding how he/she wants to invest and also why in the end. I consider that one needs to have some criteria and expectations on what it tries to achieve. It is equally important to have a diversified portfolio. You should not focus on just one sector and one direction and definitely I advocate for considering the positive impact a start-up can bring to society. In a nutshell, don't just think about the short-term return.