How Angel Investors Evaluate Tech Startups: An Insider's Perspective

Author: Elena Vrabie

What "hat" will you wear today? Will you don the cap of a tech entrepreneur, ready to take on the world with your groundbreaking ideas? Or perhaps that of a savvy business woman or man, trying on the role of Angel Investor, flirting with the idea of becoming a financial and knowledge-sharing supporter of the innovation ecosystem? The choice is yours.

No matter which, you are invited to take a peak behind the scenes of Bravva Angels Pitch Day with two Romanian projects - Zitamine , which aims to reinvent the way we add supplements to our daily diets; and Spark , whose fierce founder is on a mission to solve an educational challenge for families who need flexible classes. Curious to find out more?

How Female Investors Are Changing the Game

By now, you have already been brought up to speed about the fact that female-led startups represent a small fraction of the global startup market. But what you might not know is that Central and Eastern Europe has more female entrepreneurs than other regions , and that's also because of initiatives like that of Bravva Angels, a group of Angel Investors focusing on female-led early-stage startups.?

“Education, health services, energy and green transportation, wellness, beauty, or fashion services are large sectors in terms of market potential, and we look at founders who are trained in their industry, who identify a real problem and solve it in a way that is innovative, modern and adapted to the new consumer habits – digitalization, personalization, and sustainability, to name a few,” Ilinca Paun , founder of Bravva Angels shares with me.?

Last week, I had the chance to peek behind the curtain and attend a pitching evening. As I watched the startups confidently present their projects and respond to tough questions from potential investors, my heart raced with excitement.?

So, if you are an early-stage entrepreneur or even a beginner business angel here is what a QxA session looks like. You will discover the main areas of interest are the founders, the solution, and the market.?

Between food and health, there’s Zitamine?

The first startup that was pitched is Zitamine, which is looking to raise 350K euros. Co-CEOs - Iulia Ghita and Alexandra Stroe established the Bucharest-based project in 2022. They both have previous entrepreneurial experience in building subscription-based business models targeting B2B2C.?

The company aims to support people who want to take vitamins personalized to their needs with a monthly subscription. Users complete a questionnaire of up to 50 questions and based on a proprietary algorithm they receive personalized vitamin recommendations from a database developed by specialists. The team discovered a market of about 4B euros , where 9 out of 10 adults in Europe have taken a supplement in the past 12 months of 2022.?

QxA Time with Angel Investors

1. Team: “How do Co-CEOs work together”, was one of the questions that arose from the Angel Investors, and the reasoning behind this might be to discover if they have a balanced strategy to grow the business.
2. Market: Even if there isn’t a direct competitor locally, Angel Investors raised questions about high competition globally, but the team mentioned they are focusing on accumulating customers regionally - e.g. Bulgaria, Hungary; and planning an exit strategy - e.g. Nestle, Bayer.
3. Solution: As an early-stage solution, which doesn’t have a lot of traction or data to show, the high interest was the solution. Even if supplements are part of the food market, they can have health repercussions. Reason enough to make sure the team is ready to tackle different potential challenges: product sourcing, delivery, regulations, medical credibility, and sustainability.?

Spark aims to bring education flexibility

The second pitch was delivered by Cluj-based Ruxandra Mercea , founder and CEO of Spark. She has over 15 years of experience with the private education sector and is looking to raise €1.5M Seed Round.?

The team aims to develop both online and offline classes through various international learning hubs. The hybrid high school solution targets families that need a flexible learning environment - e.g. athletes who are training or nomads who are traveling and cannot be location-bound and time-restricted.?

QxA Time with Angel Investors

1. Solution: The investors started straight away finding out more about how the new educational system works, as it’s different from the traditional Romanian one, and what inspired it. The reasoning behind this is that the project is rather niched and premium business-wise, so the market - albeit global with the classes being in English, it’s restricted. They also inquired how often the curricula will be updated, is the school accredited, how will exams take place, and how students will be held accountable or learn to socialize.?
2. Market: The investors also inquired about the scalability of the project in the highly competitive global market, go-to-market strategy, international educational partners, and exit plan, among others.?
3. Team: The Bravva Angels community shared with me that since not all startups get to pitch, this one was interesting due to the experience of the founder building this type of business model.

What would you ask the founders if you were to wear the investors’ “hat”? ??