I Prefer Unpolished Eastern European Founders, Interview with Dan Lupu, partner at Earlybird Venture Capital
You grew up under communism in Romania and wanted “to do computers”. Is this your competitive advantage as a VC?
Studying programming helped a lot, not only in understanding the technology landscape but also in structuring my thinking in business. I was lucky to realize that I do not have the patience to become a hacker at about the same time that I had the chance to do an MBA.
How did you get into venture capital in the first place and why the focus on CEE and Turkey? Is this region “sexy” for VCs?
Immediately after university I moved into equity research, which gave me a broad view of different industries and helped me understand the world of finance and investments. It also made it clear that I wanted to be a decision maker rather than solely advising decision makers. Moving into private equity gave me this opportunity and joining Intel Capital brought me back in touch with technology. Our focus on CEE and Turkey puts us in an unique position in todays’ VC world. This is a region reach in technical talent, eager to make a mark in the world. At the same time, with only USD 150m in capital, our fund is the largest in the region, giving us unique visibility and access to investment opportunities.
You were one of the first seed investors in UIPath. How has this investment changed your thinking about startups?
UIPath proved that global technology companies can originate in any region of the world.
Has UIPath made you successful? How can founders make you successful as a VC; do founders ever think about this?
The success of UIPath did increase the visibility of the Digital East Fund in both the investor and startup community. At the same time it does create an expectation pressure we aim to live up to.
What are the lessons learned from Earlybird’s investment in UIPath? What can other founders learn from the UIPath’s amazing success story?
Regardless of our understanding of markets and technology, as investors, we depend on the entrepreneur’s ability to correctly identify and seize the market opportunity. We are there to identify those individuals and support them without getting in the way.
How did Earlybird, Credo and Seedcamp (the other seed investors ) help UIPath? What can good VCs provide to founders?
Early on, our role was to provide potential clients with the sense of security that the company is well financed and supported.
What can late stage investors help startups with? For example hiring top talent, preparing for an IPO?
As the company grows, the operational complexity changes. In the same way that with growth you need to add different management layers, growth investors bring the experience and connections which early investors lack. This has an impact on hiring, client and partners connections, as well as market strategy.
How do you grow a company like UIPath? Is there a formula or each company has its own trajectory?
UIPath has a unique profile, having a perfectly balanced global market presence with a technology platform which sits at the center of important technology trends — automation and AI adoption. I believe that the company is in the early stages of adoption by the majority of its significant client base.
Should European founders chase Silicon Valley VCs? Are European founders misreading VCs on Sandhill Road?
Founders should try to be realistic about the competitiveness of their businesses and understand the difference between getting to tell their story and being taken seriously. I see a lot of European founders which waste 6–12 months chasing an elusive investment.
A lot of early stage European VCs claim that top Silicon Valley accelerators are brainwashing founders. What’s the right balance between polishing, preparing and maturing founders? What’s your experience with UIPath?
As an investor, I think it is important to be able to identify opportunities regardless of the packaging. I personally prefer the authenticity of unpolished Eastern European founders. It’s easier for me to understand what is unspoken rather than try to figure out what is real.
How do you spot an investment opportunity? Is there a difference for angels and VCs?
I am a product guy and focus a lot on understanding the feature set, the operating environment, the buying decision. I also learned a long time ago to validate my assumptions by talking to the clients and partners. There is no idea which can triumph over the validation of the market.
Is VC boring industry?
Sometimes it can be frustrating, but never boring.