First-time founders & repeat founders

The largest portion of the founders, 43%, are first-time founders. This means that this is their first time founding a startup. Following this group are founders who have experience with one or two other startups; 31.4% of founders have founded one other startup, and 14% of founders have founded two other startups. Founders with even more experience are less common; 8.3% of founders have founded three other startups, and only 3.3% of founders have founded more than three other startups.

In total, this means that 57% of the startup founders in this data set are repeat founders, and 43% are first-time founders.

Founding team size

The largest portion of founding teams, at 65.3%, consists of 2-3 members. Solo founders make up 16.5% of all founding teams, and teams of 4-5 people and those with more than 5 people account for 14% and 4.1% of founding teams respectively.

While there is no single “best” size for a founding team, there are some advantages and disadvantages to consider when forming a team. Solo founders have complete control over their vision and decision-making, but they may also lack the skills or experience to handle all aspects of running a business. Teams of 2-3 founders can benefit from a diversity of skills and perspectives, but they may also face challenges in communication and collaboration. Larger founding teams can bring together a wider range of expertise and resources, but they can also be more complex to manage and may be slower to make decisions.

Number of employees

The largest group (45.5%) consists of companies that haven’t hired any employees yet. 20.7% of the companies have 1-2 employees. The remaining companies are distributed as follows:

• 10.7% have 6-10 employees
• 10.7% have 11-20 employees
• 9.9% have 3-5 employees
• 1.7% have more than 30 employees
• 0.8% have 21-30 employees

ESOP adoption

The pie chart shows that in 2024, 38.1% of people did not adopt an ESOP, and 61.9% of people did adopt an ESOP. An ESOP stands for Employee Stock Ownership Plan. It is a type of benefit plan that allows a company’s employees to own stock in the company.

Key roles within founding teams

The vast majority (70%) of early stage startups consist of a combination of marketing and product. This is followed by engineering (20%) and sales (10%).

It is important to note that this is just a survey and may not represent the reality of all founding teams. The ideal composition of a founding team will vary depending on the specific industry, business model, and the skills and experience of the founders themselves.

Other areas covered within founding teams

The largest category is tech development (66.7%), followed by UX/UI (16.7%) and recruitment & HR (16.7%).

Key areas not covered within founding teams, but needed

The areas of expertise that startups need the most in their founding teams are sales (25%) and recruitment (25%).

Other key areas that need filling the gaps are:

• Finance: 15%
• Tech development: 10%
• Communications & PR: 10%
• Marketing: 10%
• Design: 5%

When did founders start building their products

The largest group (36.4%) started building their products in the last 2 years. This is followed by those who started in the last 3-5 years (28.9%), in the last year (22.3%), more than 5 years ago (11.6%), and since the beginning of this year (0.8%).

Product stage

The distribution of products across different stages of development in 2024 follows the breakdown below:

Publicly launched: The largest portion of the pie chart (48.8%) represents products that have been publicly launched, meaning they are available to the general public.

MVP: 14% of products are at the minimum viable product (MVP) stage. This means a basic, functional version of the product has been launched to a limited audience to gather feedback and test its viability.

In a pivoting phase*: 12.4% are in a pivoting phase.

Prototype: 11.6% of products are in the prototype stage. This means a basic version of the product has been built but it is not yet ready for public release.

Beta launched: 10.7% of products are in the beta launch stage. This means a more developed version of the product has been launched to a wider audience for further testing and feedback.

Concept: Only 2.5% of products are still in the concept stage. This means the idea for the product has been developed but there is no prototype yet.

*In the context of technology products, pivoting refers to a significant change in strategy that alters the product’s course of development. This can encompass various aspects of the product, including:

Target market: Shifting the focus from one target audience to another, potentially addressing a different need or problem.

Product features: Removing or adding features based on user feedback, market trends, or technical feasibility.

Business model: Changing how the product generates revenue, such as moving from a subscription model to a one-time purchase or vice versa.

Underlying technology: Adopting different technologies to achieve the product’s goals, potentially for reasons like cost-effectiveness, performance, or integration purposes.

The decision to pivot is often driven by various factors such as:

• Market feedback: Realizing that the initial target market isn’t responding as expected or that there’s a better opportunity in a different market.
• Technical challenges: Encountering unforeseen technical roadblocks that make the original approach difficult or impossible.
• Shifting competition: Adapting to new competitors or changes in the competitive landscape.

While pivoting can be risky, it can also be a strategic move that leads to greater success, allowing the product to better address market needs or overcome unforeseen challenges. However, successful pivots often require careful planning and execution to ensure a smooth transition and minimize disruption to the development process and user base.

Pilot projects performed for product development

The largest percentage (70.8%) of pilot projects were conducted to test or validate a new product or service. This is followed by projects conducted to improve an existing product or service (19.2%) and those that were not applicable (10.0%).

In the context of technology products, piloting refers to the process of testing a product with a limited audience before a full-scale launch. It’s essentially a small-scale, controlled experiment that allows developers to gather valuable insights and feedback before investing significant resources into a wider release.

Here are some key aspects involved in piloting a technology product:

1. Defining the scope: This involves determining what aspects of the product will be tested during the pilot. It could be the entire product, a specific feature, or a particular user experience element.
2. Selecting the target audience: The pilot group should ideally represent a segment of the intended target market. This allows for collecting feedback from the most relevant users who are likely to use the final product.
3. Setting up the pilot environment: This could involve creating a separate version of the product for the pilot group, or limiting access to certain features in the existing product.
4. Data collection and analysis: Throughout the pilot, data is gathered from various sources, including user feedback (surveys, interviews, etc.), usage data (how users interact with the product), and performance metrics (e.g., conversion rates, bug reports). This data is then analyzed to understand how well the product is performing and identify areas for improvement.
5. Decision-making: Based on the insights gathered from the pilot, the development team can make informed decisions about the product’s future. This might involve iterating on the product based on feedback, pivoting the product strategy, or even deciding to discontinue development if the results are not promising.

Benefits of piloting:

1. Reduce risk: By testing with a limited group, developers can identify and address potential issues before they impact a wider audience.
2. Gather valuable feedback: Pilots provide real-world user feedback that helps refine the product and ensure it meets user needs.
3. Validate assumptions: Pilots help validate the initial assumptions about the product’s concept and target market.
4. Improve product-market fit: By iterating on the product based on pilot feedback, developers can increase the chances of achieving a successful market fit.

Piloting is a crucial step in the development process of many technology products, allowing for early identification of potential issues and continuous improvement before a full-fledged launch.

Product usage

Here’s a breakdown of how many users early-stage startups have:

• 24% have between 100-1k users
• 20.7% have between 10-100 users
• 12.4% have between 1-10k users
• 12.4% have less than 10 users
• 12.4% have no users yet
• 9.9% have between 10-50k users
• 8.3% have more than 100k users

When referring to technology products, product usage encompasses various aspects of how users interact with and engage with the product. It’s a broad term that can include:

1. Frequency of use: This refers to how often users access and interact with the product. This could be measured by metrics like daily active users (DAU), monthly active users (MAU), or the number of logins per user.
2. Depth of use: This indicates the extent to which users explore and utilize various features and functionalities within the product. Metrics like time spent using the product, features accessed, and actions performed can help gauge the depth of engagement.
3. User behavior: This dives deeper into how users navigate and interact with the product interface, their specific actions within the product, and the completion rate of tasks or workflows. This can be analyzed through user tracking data, heatmaps, and clickstream analysis.
4. User satisfaction: This refers to the level of satisfaction users have with the product’s features, performance, and overall experience. It can be measured through surveys, ratings, reviews, and sentiment analysis of user feedback.
5. Overall engagement: This combines the various aspects mentioned above to understand the overall level of user engagement with the product. This can be assessed through a combination of quantitative and qualitative data, providing a holistic picture of how users are interacting with and valuing the product.

By analyzing product usage data, companies can:

🚀 Understand user needs and preferences: By observing how users interact with the product, companies can gain insights into user needs, preferences, and pain points. This information can be used to improve the product and make it more user-friendly.

🚀 Measure product success: Product usage data can be used to track key metrics and evaluate the product’s success in achieving its intended goals. This can inform future product development and marketing strategies.

🚀 Identify areas for improvement: Analyzing user behavior and engagement patterns can help identify areas where the product can be improved to enhance user experience and satisfaction.

🚀 Personalize the user experience: By understanding individual user behaviors, companies can personalize the user experience by tailoring features, content, and recommendations to their specific needs and preferences.

Overall, product usage is a valuable metric that provides valuable insights into user behavior and helps companies develop, maintain, and improve their technology products to meet user needs and achieve their business objectives.

Industries addressed

Here’s a breakdown of the top 10 industries addressed by early-stage startups:

• 14.3% Education
• 12.7% Health
• 9.5% E-commerce
• 9.5% Productivity tools
• 7.9% Consumer Services
• 6.3% Dev tools
• 4.8% Entertainment
• 4.8% Transportation
• 3.2% Energy
• 3.2% Finance

These industries are pursued by 76.2% of the early-stage startups.

Other industries addressed are:

• HR
• DeepTech
• Food
• Web3
• Automotive
• Cybersecurity
• Legal
• License management
• Real Estate
• Aerospace
• Social media
• Hospitality
• Data
• Social

Business model

In the context of startups, a business model is the blueprint outlining how the company will create, deliver, and capture value. It essentially describes the strategy for:

👉 What product or service the startup will offer: This includes identifying the specific problem or need the startup aims to address and the solution it provides.

👉 Who the target market is: This involves defining the ideal customer base for the product or service, considering factors like demographics, needs, and behavior.

👉 How the product or service will be delivered: This encompasses the channels used to reach the target market, such as online platforms, physical stores, or partnerships with other businesses.

👉 How the startup will generate revenue: This is the core aspect of a business model, outlining the strategies for earning money. Common revenue models for startups include subscriptions, one-time purchases, freemium models with premium features, advertising, or transaction fees.

👉 What resources are needed: This includes identifying the resources required to operate the business, such as human resources, technology, equipment, and funding.

A well-defined business model helps startups in several ways:

👉 Focuses efforts: It provides a clear roadmap for the startup, ensuring everyone involved is working towards the same goals and objectives.

👉 Attracts investors: A strong business model with clear revenue streams is crucial for attracting investors and securing funding.

👉 Guides decision-making: It helps guide strategic decisions related to product development, marketing, and resource allocation.

👉 Identifies risks and opportunities: By analyzing the business model, startups can identify potential risks and opportunities, allowing them to plan for contingencies and adapt their strategies as needed.

While a well-defined business model is crucial, it’s important to remember that it’s not set in stone. As startups operate and gather market feedback, they may need to pivot or refine their initial business model to adapt to changing circumstances and ensure long-term success.

Here’s a brief explanation of each business model:

💡 B2B (businesses-to-businesses): Businesses sell their products or services to other businesses.

💡 B2C (businesses-to-consumers): Businesses sell their products or services directly to individual consumers.

💡 B2B2C (businesses-to-businesses-to-consumers): Businesses sell their products or services to other businesses, who then sell those products or services to consumers.

💡 B2B (SMBs) (businesses-to-small and medium businesses): Businesses sell their products or services to small and medium-sized businesses.

The choice of business model can depend on a variety of factors, such as the type of product or service being offered, the target market, and the competitive landscape.

Here’s a breakdown of the business models applied by Romanian-born early-stage startups:

• B2B2C: 29%
• B2B (SMBs): 25.8%
• B2C: 22.6%
• B2B (enterprises): 21%
• B2B and B2C (not B2B2C): 1.6%

Markets

The distribution of markets targeted by Romanian startups shows that the largest portion (16.7%) of startups target the European market. This is followed by startups targeting Romania (13.3%) and the global market (13.3%), as well as the Balkans (12.2%), a combination of Europe and the USA (5.6%) or the USA alone (4.4.%). The remaining 34.4% is spread across multiple geographies such as: South Eastern Europe, Central Eastern Europe, Europe & USA, UK, USA, Europe, North America, Global – English speaking countries, EMEA, Nordics, DACH, Western Europe, Romania, UK, Eastern Europe, Moldova, Poland, North America, Romania, Poland, Spain, Europe, China, Bulgaria.

The decision of which markets to target can depend on a variety of factors, such as the type of product or service being offered, the size of the target market, and the resources available to the startup.

Fundraising status

The funding status of Romanian early-stage startups resulted in the following breakdown:

Not applicable (external funding not sought): More than half (62.8%) of the surveyed startups did not seek external funding.

Up to €250k: Following that, 18.2% of startups are raising up to €250k.

The remaining categories group together startups seeking various amounts of funding:

• €250k – €500k: 7.4%
• €1m – €3m: 7.4%
• €500k – €1m: 2.5%
• €3m – €5m: 0.8%
• More than €10m: 0.8%

Fundraising sources

Here’s a breakdown of the funding sources used by Romanian early-stage startups:

• Family & friends: Half of the funding came from family and friends.
• Business angels: A smaller portion (33.3%) came from business angels.
• Venture capitalists (VCs): An even smaller portion (16.7%) came from venture capitalists.

The current fundraising landscape in Romania might involve a wider range of funding sources, including:

• Angel investors: Wealthy individuals who invest in early-stage companies.
• Venture capital funds (VCs) and corporate venture capital funds (CVCs): Firms that invest in high-growth companies with the potential for significant returns.
• Crowdfunding and equity crowdfunding platforms: Online platforms that allow startups to raise capital from a large number of individual investors.
• Grants: Financial awards provided by governments, corporations, or other organizations to support specific initiatives or projects.
• Bank loans: Traditional loans from banks or other financial institutions.

Most recent fundraising process duration

The distribution of the fundraising process duration for early-stage startups follows the breakdown presented below:

• 3-6 months: The largest category (26.7%) includes startups that took between 3 and 6 months to raise funds. This timeframe might be suitable for startups requiring a moderate amount of funding or needing more time to refine their pitch or secure investor commitments.
• 6-9 months: At the same level (26.7%) are startups that completed their fundraising within 6 to 9 months. This extended timeframe could be due to factors like raising a larger funding amount, targeting a wider range of investors, or encountering challenges during the process, such as needing to address investor concerns or revise their financial projections.
• Up to 3 months: The next largest portion of the pie chart (15.6%) represents startups that completed their fundraising process in up to 3 months. This could be due to factors like having a strong network of investors, a well-defined business model, or a clear value proposition.
• 9-12 months and more than 12 months: For 31.1% of startups it took 9 months or more to secure funding. This extended duration could be due to various reasons, such as raising a significant amount of capital, targeting a specific type of investor that is less common, or needing to make significant changes to their business model or pitch deck based on investor feedback.

The duration of the fundraising process can vary depending on several factors, including:

👉 The amount of capital being raised: Startups seeking larger funding rounds may require more time to secure commitments from multiple investors.

👉 The complexity of the business model: Startups with complex business models or technologies may need more time to explain their value proposition to investors.

👉 The overall economic climate: Economic downturns can make it more challenging for startups to raise funds, potentially extending the fundraising process.

👉 The experience of the founding team: Startups with experienced founders who have a proven track record or a strong network of investors may be able to raise funds more quickly.

It’s important to remember that the data provided is just a general overview, and the actual fundraising process for any individual startup can vary considerably.

The fundraising process for an early-stage startup involves securing the financial resources needed to launch and grow the business. This typically occurs before the company has achieved significant revenue or profitability. Here’s a breakdown of the key steps involved:

1. Planning and Preparation:

• Developing a compelling business plan: This document outlines the startup’s vision, mission, target market, product or service, financial projections, and how the funding will be used.
• Identifying the funding needs: Determining the amount of capital required to achieve specific milestones, such as product development, marketing, and team hiring.
• Choosing the right funding type: Exploring various options like angel investors, venture capitalists, grants, crowdfunding, or bootstrapping and selecting the most suitable approach based on the startup’s stage, industry, and growth plans.

2. Finding Investors:

• Building relationships: Networking with potential investors, attending industry events, and participating in startup programs to connect with individuals and firms interested in early-stage companies.
• Creating an effective pitch deck: This concise presentation summarizes the startup’s business model, value proposition, market opportunity, team, and funding requirements, aiming to capture investor interest.
• Negotiating terms: Discussing the terms of the investment with interested investors, including the amount of funding, ownership stake, and other conditions.

3. Due Diligence and Closing the Deal:

• Investor due diligence: Investors will conduct their own research and analysis of the startup, including evaluating the business plan, financial statements, and management team.
• Startup due diligence: The startup may also conduct due diligence on potential investors to understand their investment philosophy, interests, and track record.
• Legal and financial processes: Negotiating and finalizing contracts, legal agreements, and other necessary documentation to close the funding round.

Additional factors to consider:

• Regulations: Depending on the funding type and location, there may be specific regulations or legal requirements to be met during the fundraising process.
• Time commitment: Fundraising can be a time-consuming process, requiring significant effort from the startup team in preparing materials, meeting with investors, and negotiating terms.
• Alternatives to traditional funding: Startups may also explore alternative funding options such as accelerators, incubators, or revenue-based financing depending on their specific needs and circumstances.

Overall, the fundraising process for an early-stage startup is a crucial step in securing the resources needed to launch and grow the business. It requires careful planning, preparation, and a strategic approach to attract the right investors and secure the necessary funding to achieve the startup’s goals.

Fundraising amount in process

The largest portion of funding in process falls in the €250k to €500k range, accounting for 27.9% of the total. Following that is the up to €250,000 range, accounting for 26.2% of funding in process. On a similar level is the €1M to €3M range, which accounts for 26.2% of funding in process.

Here is a summarized breakdown of the funding in process according to the pie chart:
€250k to €500k: 27.9%
Up to €250k: 26.2%
€1M to €3M: 26.2%
€500k to €1 million: 11.5%
€3M to €5M: 3.3%
€5M to €10M: 3.3.%
More than €10M: 1.6%

All the fundraising that is being pursued in 2024 generally falls into the following buckets: pre-seed, seed, series A.

Pre-seed and seed funding are the very earliest stages of funding for a startup company. They can be thought of like planting a seed (the idea) and watering it (the funding) to help it grow.

Here’s a breakdown of each:
Pre-seed funding: This is the absolute earliest stage, often referred to as the “friends and family” round. It’s typically a small amount of money used to get the most basic things done, like:
Validating the business idea
Developing a prototype
Covering initial legal and operational costs
Bringing on a few key hires (if needed)
The money often comes from the founders themselves, close friends, family, or angel investors who are willing to take a big chance on a very early-stage idea.

Seed funding: Seed funding is the first official round of equity financing for a startup. It’s like providing the nutrients to help the seed sprout. The money is typically used for:
Building a minimum viable product (MVP)
Conducting market research
Hiring a small team
Starting initial marketing and sales efforts
Seed funding usually comes from angel investors or venture capitalists who are looking for startups with high growth potential.

The Funding Journey: From Pre-Seed to Seed

The very first step in a startup’s funding journey is the pre-seed stage. This is when the idea is still just an idea, and there’s no product yet. Founders often tap into their own savings or seek funds from friends, family, or angel investors to get things going. This money is typically used to validate the business idea, develop a prototype, and cover initial legal and operational costs. It’s like watering a seed to see if it will sprout.

If the pre-seed stage shows promise, the startup may then be able to secure seed funding. This is the first official round of equity financing, and it’s used to take the idea to the next level. Seed funding is typically larger than pre-seed funding, and it comes from angel investors or venture capitalists. The money is used to build a minimum viable product (MVP), conduct market research, hire a small team, and start initial marketing and sales efforts. This is like providing the nutrients the seedling needs to grow.

Series A funding is a significant milestone for a startup, marking its first major round of external funding. Here’s what it typically implies:
Company Stage: The startup has progressed beyond the initial idea and validation phases. It likely has a minimum viable product (MVP) with some traction in the market.
Investor Focus: Series A investors are typically venture capital firms specializing in early-stage companies. They’re looking for startups with a proven concept, a strong founding team, and a clear path to profitability.
Funding Goal: Series A rounds raise significantly more capital than seed funding, typically ranging from $2 million to $15 million. This money is used to:
Scale the business: This could involve product development, marketing and sales efforts, and team expansion.
Achieve key milestones: These might include reaching a specific number of customers, achieving product-market fit, or securing major partnerships.
Key things to keep in mind about Series A funding:

It’s a Competitive Process: Securing Series A funding is not easy. Investors will thoroughly evaluate the startup’s potential for growth and return on their investment.
Focus on Growth: The focus in a Series A round shifts from just proving the concept to demonstrating the potential for significant growth.
Not Guaranteed Success: Even startups that successfully raise Series A funding don’t guarantee success. Many challenges lie ahead on the path to profitability.
Overall, Series A funding is a crucial stage for startups. It provides the resources needed to scale the business and take it to the next level.

Revenue streams

Here’s a breakdown of the revenue streams in place:
Recurring revenue: This makes up the largest portion of the pie chart, at 47.1%. Recurring revenue refers to income that a business receives on a regular basis, typically through subscriptions or contracts.
Not applicable – not monetizing yet: This category accounts for 33.7% of the pie chart. This refers to startups that are not currently generating any revenue.
Non-recurring revenue: This category accounts for 19.2% of the pie chart. Non-recurring revenue refers to income that a business receives from one-time transactions, such as product sales or service fees.

The main differences between recurring and non-recurring revenue streams boil down to predictability and continuity.

Recurring revenue: This is like a subscription box arriving at your doorstep every month. It’s income a business can expect to receive at regular intervals, typically through subscriptions, contracts, or memberships. Here are some key aspects of recurring revenue:
Predictable: Recurring revenue provides greater predictability for businesses, as they can more easily forecast future income. This stability is attractive to investors.
Continuous income: Recurring revenue creates a steady stream of income, which can help businesses with budgeting and planning for the future.
Focus on customer retention: Since recurring revenue relies on keeping customers happy and subscribed, businesses tend to focus on customer retention strategies.

Non-recurring revenue: This is like a one-time purchase at a store. It’s income generated from a single transaction and isn’t guaranteed to be repeated. Here’s what characterizes non-recurring revenue:
Unpredictable: It’s difficult to predict how much non-recurring revenue a business will generate, as it depends on individual customer purchases.
Varied income: Non-recurring revenue can create fluctuations in income for businesses. There may be periods of high sales followed by periods of low sales.
Focus on customer acquisition: Since there’s no guarantee a customer will return, businesses with non-recurring revenue models often focus on acquiring new customers.