The FinanceCorner and Kennispark Twente held a national meeting of entrepreneurs and investors at the University of Twente with the theme: stacked funding. The general conclusion was clear: we are not nearly at the level of the best countries, such as the US, when it comes to risk investment and financing strategies.
Start-ups are a key driver of the modernization of our economy, therefore the StartupDelta of Neelie Kroes focuses on this group. But are they funded in a good way? Is there enough money and are they ready for exceptional growth? 100 entrepreneurs and 50 investors discussed about these issues during the event Fund the Future, held last week at Kennispark Twente. Stacked funding revolves around the combination of appropriate forms of financing, through loans, equity, crowd funding, credits, grants, venture capital and so on.
Image credits: Daniel/Flickr
Financing is the oxygen of the company
These are important themes. That became clear when one week before the registration had to be closed due to the desired maximum size of the group. The topic is on top of mind by financiers and entrepreneurs. “Funding is the oxygen of the company,” as one participant summarized it.
Young culture of risk investment
The general conclusion of the day was clear: we are not nearly at the level of the best countries, like the US. Firstly, The Netherlands has a long-standing culture of investing, but only a reasonable young culture of risk investment. That means that the interconnection of all types of funds is not optimal. There are in our country many small funds divided across sectors, regions and life stages of a business. They each have specific requirements. “Try to get a good overview of that as an entrepreneur.”
Little insight into financing strategies
A second concern is our entrepreneurs themselves, many of whom sighed: help us to understand how we fund wisely, help us to build our strategy. There is still little understanding of good financing strategies. Therefore, entrepreneurs feel insecure and sometimes do business with the first who is prepared to keep a serious conversation. The call for education was very strong.
Image credits: Miro Dudas/Flickr
Too great a distance between investors and entrepreneurs
But what the most noticeable jump is, is the distance between entrepreneurs and investors. Where they must ultimately make up the team that – in the interests of both – has to build a successful business, too much is often argued from its own position. The ‘language’ is not the same, and sometimes there is too little respect for each other’s contribution.
Ray Quintana Cottonwood Technology Fund Europe summarized it as follows: “By making risk management in the investment more important than the creation of an optimal chance, we suffocate the baby: there are small amounts of money at far too strict conditions. In that way, you stall the business and that isn’t of mutual interest. You do not build global companies in that way. ”
Adriaan van Loon of De FinanceCorner and Kees Eijkel of Kennispark Twente saw in the debate an urgent call to do more to educate both the entrepreneurs and the investors. “As the common language and expectations develop better, we can expect more international growers in The Netherlands. We must break through. ”
Ray Quintana, who binds Cottonwood associates strongly to the place of their origin in The Netherlands, pointed out the danger of underestimating the problem. “If we continue at this rate you are particularly interesting for foreign investors: if you do not grab the diamonds, others do though. The Dutch technology is world class.”
The Fund the Future meeting is a good call to action to the next meeting on May 24, 2016. Its theme has already been given: “Financing Hard Tech Companies: Challenges & Opportunities”.