When thinking about the Romanian start-up ecosystem, now might be the best time to launch something. Especially compared to, say…10 or 15 years ago. There is quite some capital available, a few accelerators, and the mindset, by itself, has developed in such a way that young founders can start a company here and scale it to global levels in the next 5-10 years. We’re really becoming the “start-up nation”.
But why not a “growth nation”?
The deployment of private capital for Romanian companies is increasing but so is the need for it. I’ve witnessed this evolution firsthand. Having just joined the Fortech Investments team, I am in awe of what I see in our start-up ecosystem. The new generation of founders brings a new life into the market. So much that they might be shaking some of the beliefs that more experienced entrepreneurs held so strongly. They learn that the era of one-man show companies is ending, they learn that their company is not their baby, and even that private capital might be the solution. Well, a solution that they weren’t looking for, in the first place.
Most of my previous experience comes from working with entrepreneurs in the worst stage of their company lifecycle, maybe even the worst stage of their life – the stage of distress. While some say that it’s “the best business school”, I think that not everyone has to go through it. Especially nowadays, when resources and knowledge are so available and so widespread.
After making this switch from one extreme to another, I understand more about this emerging ecosystem of ours, by looking at it through a wider lens. And the more I understand about it, the more I am starting to notice a gap that has only gotten bigger, especially in the past few years. I am talking about the gap between early-stage start-ups and growth-stage tech companies. This gap means that there are too many little players in the market, making it too fragmented. I think that only by closing this gap, we can become a “growth nation”.
I believe that part of this gap is due to timing. Established tech companies who are now in the growth stage simply didn’t get to ride this new wave of start-ups, venture capital, high growth, and the hunt for unicorn status. Because of this, they took a different path. A good path, but a more cautious one. They bootstrapped, worked hard to become profitable, and are now doing good. But they can do better. They can aim higher.
Don’t get me wrong, this experience holds a lot of valuable lessons for young founders, and most of it is about balance – balancing a growing team, while maintaining company culture, balancing the expansion of operations, while maintaining quality and consistency, balancing short term goals with long-term vision and balancing cashflow, while revenue may fluctuate.
But the reverse is also important – growth-stage companies can learn a lot from early-stage start-ups too. First of all, they need to learn how to aim high and think globally. With their hard-earned business skills, and such visionary thinking, they can truly make an impact beyond what they thought possible.
Another important lesson is that going at it alone is not always the best approach. Yes, their business is their baby, but a baby also needs two parents. What I am trying to say is that more experienced founders should embrace the idea that bringing in some other heads can be the decisive factor for how much they want to scale their business. Other heads might mean investors or strategic partners. It’s hard giving away part of your company, but what if this means more returns for them?
This is why, at Fortech Investments, we decided to invest in growth-stage companies. We want to support experienced founders to go beyond what they thought possible for their business – we want to help them get more adapted to today’s fast-paced business environment and technology advancements. We provide capital and strategic business and technical support to help them expand to new markets, improve their products, and scale their business sustainably. We want to help them achieve the true potential of their businesses, while they understand how much more they can do, by taking a more modern approach, inspired by start-ups.
Irina Misca (in the opening picture) is an Investment Manager at Fortech Investments. She aims to balance risk in Fortech Investments’ portfolio by deploying capital in more mature assets while helping the current portfolio companies grow and develop further. If you want to talk more about capital opportunities for your growth-stage company, reach out to her on LinkedIn.
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