“The DFF has laid a strong foundation for future projects”

Tim, what makes DFF so special? 
“Through the DFF, we have attracted € 150 million in European capital for investment funds which finance innovative start-ups and scale-ups in the Netherlands. Along with our own investment of € 150 million – € 125 million by Invest-NL and € 25 million by the Ministry of Economic Affairs and Climate – this makes €300 million in initial capital available. I know from personal experience how difficult fundraising can be. It played a major role in previous jobs I have held, and it was never easy. The great thing about the DFF is that it can really make a difference for venture capital teams that are working to attract funds.”

What exactly is the nature of that difference? 
“The DFF choosing to get involved as the first investor can encourage a lot of other parties to climb aboard. In other words, a relatively small stake from Invest-NL can mobilise a large sum of capital that will ultimately be invested in innovative companies.”

Explain how that ‘mobilisation’ process works. Is it a case of one sheep jumps the ditch and the rest follow...? 
“We ask the EIF to invest in venture capital funds on our behalf. The EIF conducts extensive research into these funds and has a very good reputation as an investor. So if a fund receives an investment from the DFF, it’s a mark of quality. Not only that, but it gives investors far more certainty that the target amount will be raised. That’s why it’s often a gamechanger for private investors if the DFF also decides to get involved.”

Can you talk us through the process of putting a deal like that together? 
“This process started with the idea of setting up an instrument to reinforce the venture capital landscape and offer Dutch companies better access to European investment funds. But then, of course, you still have to work out all the details. You have extensive talks with the various stakeholders about the scope of the instrument, but also about its practical implementation.

We looked closely at the EIF’s investment processes and the form our collaboration might take. For example, how the DFF will assess funds on environmental, social and corporate governance criteria. These values are important to us at Invest-NL and so we really want them to be part of how the DFF operates. At the next stage, everything needs to be set out in agreements, down to the smallest detail.

At the final stage, we – the Invest-NL team – drafted an investment proposal and had it approved by our own Investment Committee, our Supervisory Board and the Minister of Finance. And now we are ready to roll! The first fund investments are lined up, so even in the short term we can already use them to provide capital to innovative entrepreneurs.”

What is your role as a Business Development Manager? 
“It covers a very wide range of activities but perhaps it can best be summed up as ‘getting the deal done’. In other words, doing everything it takes to put funding in place, removing any obstacles along the way: to make financing possible where it didn’t seem possible at first.”

And what does that mean on a daily basis? 
“My work goes from carrying out market research, producing financial forecasts, and identifying and removing obstacles in the field of financing, regulations or legislation, to negotiating the terms of the deals themselves.”

What have you learned from all this? 
“Invest-NL is a brand-new, young organisation that brings together a lot of people from many different backgrounds. I've only been working here since June and there are still plenty of colleagues I have yet to meet. Joining under the current ‘remote’ circumstances has been quite a surreal experience. But it’s been inspiring to see how we managed to get in synch with one another from a distance and that working from home hasn’t stood in the way of mutual cooperation. As I worked to get the DFF up and running, I got to know a number of different colleagues very well. It has laid a strong foundation for future projects!”

The DFF is now a fact. What’s next on your horizon? 
“Setting up the next fund, of course! And the one after that, and the one after that... We are currently in the process of forming a dedicated team to make all our indirect investments. This means investing in venture capital funds that are already raising capital, but also initiating new projects ourselves. The next project will focus on financing deep tech companies.”

Why deep tech? 
“These are companies that require a lot of capital at an early stage, while the risks are still high. Operations like these often struggle to find their feet in the Netherlands and are more likely to relocate abroad, often to the US or China. That’s a real pity and something we shouldn’t allow to happen, not least because we have a very effective ecosystem in the Netherlands for developing deep tech innovations. If we can find ways for Dutch or European parties to finance these companies over a longer period, then we can take these innovations a step further. And with that comes knowledge development on a vast scale, with the power to make the Netherlands more innovative. And that’s what Invest-NL was created to do.”

Contact 
Do you have any questions regarding the Dutch Future Fund? Share them with Tim van Vledder (DFF) tim.vanvledder@invest-nl.nl.