Finding an investor

What sort of investors are you looking for? There are several options available, for example a fund or an investor who invests directly in your business. This might include business angels, Regional Development Corporations (RDCs), private-equity firms, family and friends, or even a Dutch or international celebrity.

Finding a business angel

A business angel is someone who invests in businesses for commercial reasons, with the intention to make a profit. Since business angels are themselves former business owners, they are well positioned to assist and support you. Business angels are also known as informal investors. It is not always easy to find a business angle that is right for your business. Use existing networks of business angels and have a look around your own network.

The Netherlands

If you are looking for an investor in the Netherlands, you can use the information provided by the Vereniging van Business Angels Netwerken Nederland (Dutch Network of Business Angels/BAN). BAN Nederland includes networks which act as intermediaries or matchmakers between business owners and investors. You can check the BAN Nederland website to see which networks are affiliated and what their objectives are.

The website of TechLeap.nl also contains a database where you can find investors.

Europe

Examples of European networks of business angels:

• European Business Angel Network
• Business Angels Europe

Interesting publications

BAN Nederland offers several interesting publications: the first is intended for business owners looking for investors, while the second is designed for investors:

• How do I find an investor? (in Dutch)
• Informal Investment Manual (in Dutch)

Your own network

Since many investors tend to team up with business owners from their own geographic area, it might be worth your while finding an investor within your own network (for example, through your personal network or social media network). You may also choose to enlist your accountant, bank, or other business owners. Make a point of appearing in spaces where these individuals and organisations meet each other, including at events, trade fairs and exhibitions, and activities organised by business clubs and business associations.

High-profile investor

A high-profile investor can also inject some cash into your business. However, there are both pros and cons to working with well-known investors. Maaike Bruggeman, known as ‘The Business Trendwatcher’, researches and analyses business trends in the Dutch and international corporate sector, and provides examples.

For example, actor Leonardo DiCaprio invested a large amount in the Dutch cultured meat company Mosa Meat, while billionaire Bill Gates sank millions in Dutch online supermarket Picnic. Bruggeman states that business owners have a lot to learn from Mosa Meat and Picnic: “These companies are getting media exposure and are involved in product innovation and working on their brand positioning behind the scenes. They also represent a link to the future: sustainability, innovation, and efficiency, plus the potential to expand on a global scale.” On the downside, you also end up with a certain degree of dependence: “Because Picnic really needs that capital to be able to expand.

Bruggeman states that there are also Dutch celebrities who make smart investments, such as Bas Smit and Nikkie Plessen. “These are not people who make random investments, but born entrepreneurs who preside over strong business empires. If you are lucky enough to have one of them invest in your business, you are not only getting a star to raise your profile; you get their entire team, which is full of very knowledgeable people.”

Advantages

An investor can help you generate a lot of publicity. This can benefit your business if your intention is to scale up in a short period of time, enter international markets, or if your loan application was declined by the bank. At the same time, an investor will also share their knowledge and network with you. Yet it is crucial to be aware who exactly is investing in your business, and what impact this can have on your business. Bruggeman: “Check whether the brand identities are compatible. Do you have a win-win situation on your hands? Is this merely a cash injection, or will the investor contribute their knowledge and expertise as well? Will they advise you, and, if so, do you want that kind of interference? Do they have the kind of track record you can learn from? And will you agree with each other on specific issues in the long term?

Disadvantages

If your investor has a negative reputation or attracts negative media coverage, this could backfire on your business. A case in point is the Swedish-based company Oatly, which produces oat-based dairy substitutes. In 2020, they received funds from high-profile people such as Oprah Winfrey, Jay-Z, and Natalie Portman. Investment firm Blackstone also invested in the oat-based product. This drew a lot of criticism, because environmental and climate activists stated that Blackstone had previously invested in companies that have been involved in deforestation in the Amazon rainforest. The incident ended up harming the image of both Oatly and the celebrities who invested in the company.

You should also keep in mind that you will always pay in some way if you decide to partner with an investor. For example, the investor might be looking for a percentage stake in the company, control over key company decisions, or a share of the profit. Bruggeman’s advice: “You should always take time to find out what the added value is of such an investor. It could end up being a boon to your company, but it could also turn out to be a bit of a poisoned chalice.”

Get advice

Help increases your chances of obtaining financing, and with the right advisor and a good financial rationale, you will get your finance application approved in no time. These advisors will help you get started.