Paulo Andrez on how governments can support entrepreneurs – “Angels are key for Romania and the CEE Region’s entrepreneurial ecosystems”

The European Commission (under H2020 PSF), recently published a report on “Specific Support to Romania – Start-ups, Scale-ups and Entrepreneurship in Romania”, created by a panel of experts led by EBAN President Emeritus Paulo Andrez. EBAN interviewed Paulo to get more information on the report and its importance as a guideline to help the development of a country’s entrepreneurial ecosystem.

Tell us in a few words what the “Start-ups, Scale-ups and Entrepreneurship in Romania report is about.

The work of the Romanian expert group, which resulted in this report, was commissioned after a request from the Romanian government to get technical support from the European Commission, as a result of which a PSF expert panel was created. The panel made two visits to Romania to study the country’s early stage ecosystem in October 2016 and February 2017. The panelists, including myself, met with ecosystem stakeholders and government officials to try to understand the strengths and weaknesses of the Romanian early stage ecosystem. The main purpose of the report was to provide recommendations based on European best practices but also based on suggestions from the stakeholders interviewed during the visits, which the expert panel then validated based on their feasibility and the likelihood of a positive outcome.

How did Business Angels and Business Angel Networks figure into the report?

One of the most important and largest parts of the report is dedicated to angel investing. Business angels are key to supporting the entrepreneurial ecosystem in Romania, as they can provide startups with mentoring and networking, in addition to financial investment. I firmly believe that a strong business angel community in Romania will dramatically improve the country’s entrepreneurial ecosystem.

What roles do the private and public sectors play in the development of Romania’s early stage ecosystem?

The private sector plays a crucial role in the development of an entrepreneurial ecosystem, however, in order to ensure its success, the right incentives are needed are needed to be put in place and that is the role of the government. When governments give grants to entrepreneurs or support public VCs, they are, in a way, creating an obstacle to the development of an angel community, as these act as competitors to business angels.

The Romanian government should work to implement policies that are favorable to angel investors. They should also work to increase transparency and the ease of doing business. All of this would go a long way in opening up the Romanian market to international investors, which is crucial for any early stage ecosystem.

You chaired a similar PSF expert panel for Slovakia. What are the main differences and similarities between Slovakia and Romania?

In some respects, starting with their size, the two countries are quite different. But, while Romania and Slovakia have different strengths, both countries are facing the same challenge in terms of their angel investment communities. This is comparable to some other countries in the region.

Do you think the report can be taken as a guideline by other countries in the CEE region?

Yes. The two reports on Romania and Slovakia are very important, as they show how vital the existence of a strong business angel community is for any entrepreneurial ecosystem.

The national governments of the CEE countries can use the reports as a guideline for what types of policies help develop angel investment and, consequently, entrepreneurship. Once national policies are aligned toward this purpose, the possibility for regional cooperation between CEE countries with the goal to develop cross-border angel investing should be next on the horizon.

The report on “Specific Support to Romania – Start-ups, Scale-ups and Entrepreneurship in Romania” can be downloaded here.

Article written by Keti Chikhladze, EBAN Marketing Manager