Romania seen through foreign investor eyes
I am a Romanian businessman, but I consider myself lucky for being born in a time when business became borderless. In other words, I’ve been interacting with non-Romanian partners for almost 10 years. So, since this text is in English, you are surely interested in a short list of my foreign partners’ perceptions of Romania. Warning: most positive things have a downside.
Work hard, play hard
Yes, we, Romanians, are known for that. We get enthusiastic quickly and react well to uncommon tasks, stimulated by the novelty of what we have to do. Also, overtime is less expensive in Romania than elsewhere for various reasons. Every foreigner I know was happy with the fact that we are connected 24/7 and most of us do react well to business messages sent at unusual hours, especially having in mind time zones.
However: Things can become hectic at this pace. If somebody spent 16 hours at the office the day before, you can hardly expect them to deliver something good the next day. Somehow, in this part of the World, we have to protect ourselves from work excess in order to be able to obtain better long-term results.
Good English language knowledge
You can order a beer in English almost anywhere in a big city. You can even bet on a certain degree of command of English from middle-aged taxi drivers. There are even things that Romanians can hardly name in their native language, such as computer menus or marketing lingo. Romanian itself got invaded by English after the fall of communism, in domains that simply lacked the vocabulary. Most of them are related to business or technology.
However: There are people who have studied English and there are people who learned it by ear. You may face some misunderstandings ranging from funny to problematic. You also may be surprised of how little English legalese a technical person understands and the opposite — what a lawyer can make of a marketing report. My advice: if you’re in search of really strong abilities, look for English certificates rather than self-assessment in resumes.
One could hardly say anything good about Romania in this respect. In my view, you can never be cautious enough about it. Have you heard about the rule that you’ve got to get the agreement of your closest neighbors when setting up even the smallest, quietest business in an apartment? An American friend of mine asked a bureaucrat about the meaning of it and the bureaucrat frowned: ‘There have been cases when we’ve had dozens of companies registered in the same apartment, which is totally fishy.’ The American was bemused: ‘This is precisely what I pay for in New York and it’s totally legal. A box located at a physical address, together with hundreds of other businesses, just in case. It’s 50 dollars per year and it’s the only address I need in the US!’
Responsiveness and punctuality
A big part of Romania, at least the one you’ll be interacting with mostly, is somehow prone to progress. I’m not bragging with my conationals – it’s the observation of an Italian partner. It comes down to the will to overcome ourselves and catch up with what is sometimes still called here ‘The West’ or ‘The Civilized World’. This is causing the enthusiasm and ability to work hard I’ve already mentioned and, obviously, punctuality. You can use it all to your own and your local partners’ advantage.
However: Have you ever heard anybody saying in Romanian ‘Imediat!’? It is an answer to a request and it literally means ‘Immediately’ or ‘Right away, Sir’. Some other cultures have it, but in Romania it’s some kind of automated answer, it hardly means anything. To a Swiss gentleman that I know, it means: ‘Gimme 15 minutes’, or simply: ‘F… off!’ The Swiss gentleman owns an Omega and I suppose he knows a thing or two about time.
Yes, Bucharest – as well as other big cities in Romania, such as Cluj or Iași — is lots of fun. You might have heard of the Old Centre, which is something similar to Campo de’ Fiori in Rome or the Jewish Quarter in Budapest. It’s right in the center, full of pubs and clubs. The kind of area that travel guides call, in lack of a better word, ‘vibrant’.
However: During weekends, the Old Centre gets stormed by low-cost city break cheap beer addicts and they sometimes don’t even book a hostel room. Music is loud, fine cuisine is scarce and yes, everything is cheaper than in London, but significantly more expensive than in other parts of Bucharest. My advice: look for an Arabian restaurant. You might have nice surprises, because they are run by Palestinian or Lebanese folks that came to Romania in the eighties, in communist student exchanges. Many of them have remained here, got into the food business and they’re really good at it.
All in all, I do love Bucharest a lot, in spite of what I’ve said. But a foreigner’s experience here depends strongly on their local contacts. As most other peoples, Romanians are very appreciative of their own hospitality. In general, it’s true, we are very welcoming, because until 30 years ago we were isolated and we had to report contacts to foreigners to the communist Police. To younger people in big cities, strangers are less appealing. So, in the end, finding compatible partners is a good idea in terms of personal comfort. As it always is for business, isn’t it?
If you’re a startup or scale up founder, or if you are working up to launching your idea, events can be useful to see how others do or dit it. It’s useful to see what worked and what didn’t for successful entrepreneurs, how they think, their approach to business.
It can take a lot of time and energy to attend business events, and the gains aren’t always immediate, but success doesn’t happen in isolation – entrepreneurs need a certain vibe and energy to keep going, they need networks, need to be connected to their markets, their competitors and their peers.
I go to a few events every year, and I choose those where I am likely to see new ideas put into action, meet smart people and explore different sectors. I do focus on my key areas (property, fintech and medtech), but I keep my eyes open for what’s going on outside of there areas too. So here is what’s on my list currently.
- Central European Startup Awards – happening this week in Bucharest!
Conflicting agendas mean that unfortunately I’m not going, but I’ll follow it with interest.
This is a regional program run by the Global Startup Awards. In Romania they’ve partnered with Impact Hub, one of the biggest co-working spaces and entrepreneur networking platforms. Annually, they select and award startups in tech / web industries. After the national phase of Central European Startup Awards competition, the winners of each of the 10 countries (Austria, Poland, Czech Republic, Slovakia, Romania, Bulgaria, Serbia, Croatia, Slovenia and Hungary) participate in a regional competition, whose winners are announced on November 21st in Bucharest.
2. Disrupt Berlin – 11-12 December, Berlin, Germany
Organised by TechCrunch, Disrupt Berlin showcases emerging trends in the business of technology and is a great place to meet or find information about game-changing founders, startups and technologies.
There are a multitude of conferences, workshops, networking opportunities and companies from all aspects of tech, but focused in on several category tracks. I'm looking this year at Artificial Intelligence/Machine Learning, BioTech/HealthTech, Blockchain and FinTech, but there are a few others.
3. Bucharest Tech Week – May 2020, Bucharest, Romania
5 days of conferences hosting international & local speakers, and a B2C gadgets and tech expo. Conferences are focused on innovation (seems to be an umbrella theme, which can fit anything these days though), HR, some coding conferences but also Fintech.
4. Wearable Europe - 13 - 14 May 2020, Berlin, Germany
Conference and exhibition focusing on wearable technologies, applications, and their commercialisation progress. The conference is part of the IDTechEx Show, a series of synergistic events on Printed Electronics, wearable, sensors, IoT, graphene & 2D materials, energy storage, electric vehicles.
5. EU-Startups Summit – 28-29 May, Barcelona, Spain
Some of Europe’s hottest startups and successful European entrepreneurs - over 1,500 founders, startup enthusiasts, corporates, angel investors, VCs, and media from across Europe. The two-day event is a great opportunity for networking, and a meeting point for aspiring entrepreneurs and investors who are aiming to build international tech companies.
6. London Tech Week - 8-12 June 2020, London, UK
A 5 day technology and innovation marathon, with events on connecting global markets, cybersecurity, digital transformation and innovation, for startups and scaleups.
7. Webit Festival Europe - 17-20 June 2020, Valencia, Spain
A huge event, Webit is a B2B and B2C festival and tech fiesta: 15.000 delegates, 450 speakers, 1,500 selected startups, 500 investors, international media.
With specialised summits for many verticals, I particularly am interested in the summits for health, fintech and blockchain. Other summits focus on cybersecurity, mobility, growth, future of food, or digital entertainment & media.
8. Techsylvania – 20-23 June 2020, Cluj, Romania
One of the biggest tech events in CEE, Techsylvania has tens of events, workshops, keynote speakers and panels. It can be very informative and great for networking and for benchmarking ideas, because it has almost 4.000 attendees - engineers, founders, investors, executives and CEOs of IT & digital companies, banks and startups.
There is a startup competition at Techsylvania too, Startup Avalanche, for early-stage startups, which get to meet international VCs and investors as they compete for the Grand Prize – €100,000 investment.
Over the last decade, I've built my professional life as an investor, focusing on 3 key areas: financial services, real estate and tech startups. I’ve participated in the setup and development of two major fintechs, and after those two successful exits I’m now directing my resources into building a new enterprise in this area – the Key Way group.
I've started, participated in and developed companies in Romania, as well as Bulgaria, Hungary, Czech Republic, Germany, the UK, Mexico, Dubai and South East Asia. I'm constantly looking for new segments, new markets and new opportunities, and therefore I interact regularly with the regulator institutions and official agencies in various countries and markets.
The most recent example is the GCC area (Gulf Cooperation Council - Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates, and Saudi Arabia). I started to research opportunities in that area at the end of 2018 - more specifically, the United Arab Emirates, which are establishing themselves as one of the most dynamic markets in the world.
The whole experience of working with the official institutions there was a great example of how to attract and encourage investors! ADGM, the Abu Dhabi Global Markets regulator, was established quite recently and I was absolutely impressed with their professionalism.
To start off, I researched the local market regulators online. The information was clear and easily available: I contacted them online, via their website and LinkedIn accounts. They responded promptly, and in only a few days, we set up a series of meetings with the financial markets regulators in both Abu Dhabi and Dubai!
The ADGM gave me full support and very clear, detailed information on what and how I need to do to obtain a trading licence in financial services in the UAE. I met with representatives from both the ADGM registration department (where all new businesses have to register before they acquire a licence for online trading) and from the FSRA (Financial Services Regulatory Authority).
They were very clear on the procedure, steps to follow and criteria we need to meet, which is a fantastic help for an investor on a new, highly regulated financial market.
In a few days I started the onboarding procedure - everything happens online, everything is digital, everything is set up for maximum ease and transparency.
They set investors up for success, but they make sure they vet them thoroughly as well! A "user friendly" approach does not mean lower standards, quite the opposite - they made sure I meet all commercial and business criteria, they assessed my financial, capital and business status and previous experience, and checked references from markets in which I operated previously.
We went through a process of very rigorous assessment and due diligence, and several meetings where I detailed our business plan and long term vision. Professional but friendly - you feel welcome, encouraged and supported as an investor.
Furthermore, their “enthusiasm”, or appetite for new business, equaled mine! They’re happy to welcome new businesses, they work hard to attract them and to set them up for success. I was very impressed that they genuinely appreciate the fact that investors, however big or small, choose their market to set up a company.
I’d love to see this same level of energy, hard work and appetite for business in my home country, Romania.
While other jurisdictions welcome investors and work hard to create the framework for development and success, I often feel that the Romanian regulators, for financial markets and not only, start from a default position of suspicion or, at best, indifference. Investors are regarded with thinly veiled (if at all veiled!) suspicion and distrust and sometimes downright hostility, you almost feel guilty or embarrassed to be successful financially.
I hope to see this mentality change in Romania, because I, as well as most Romanian entrepreneurs I know, really want to make our country a top choice for investments, not just in outsourcing and services. We want to make Romania known for its know how and creativity.
I think Romanian regulators should remember that their whole purpose of existence is to enable business, not hinder it. And as investors, especially once we see best practices from other jurisdictions, we need to remind them of this reality.