Angel investors in the Netherlands tend to invest in companies they understand and where they can contribute to the management decisions. Since Angel investing is based on personal gut-feel they gravitate towards products they themselves might use. Find out about the different types of investors in the Netherlands, what kind of industries they mostly invest in, and what is the best way to approach Angel investors.
Angel Investors in the Netherlands
Types of investors/investor groups in the Netherlands
Paradoxically it is quite difficult to raise smaller amounts in the Netherlands. An investment amount below three million is quite challenging, especially in a space where exit opportunities are hard to find. An amount above three millions is already easier because there is more professional capital available there. The easiest exit opportunities are usually in MedTech, and so capital is often more easily available there. For smaller investments in other domains it is hard to find investors. There are some successful former entrepreneurs who are investing capital in new companies. That is particularly common for web and app startups. Those investors are very good. But it is fair to say that there are not enough of them given the demand for capital from all sides. In only a few years Leapfunder was able to conquer a very substantial piece of the Dutch market: it is hard to raise Angel funding without passing by at least some of its more active investors. On Leapfunder there are also many investors who have been successful in other careers, and have decided to specialize in startup as investors while their main professional experience was elsewhere. In many cases startup can also find high quality investors that are ‘one-time-believers’. Those investors are not building a portfolio but like a specific startup so much that they decide to place a bet.
The industries Angel investors in the Netherlands mostly invest in
Angel investors in the Netherlands tend to invest in companies they understand and where they can contribute to the management decisions, because they understand the industry. Most hard science companies require a very specific technical know-how, so Angel Investors tend to hesitate in those areas unless they’re very specialized. They tend to invest in web and app tech companies. Since Angel investing is based on personal preference they gravitate towards products that they themselves might use. If it’s something that an Angel investor himself would never use, the company will have to work a little bit harder to find funding. If you’re supplying something they would use themselves, they’re much more willing to invest.
The best way to approach Angel investors in the Netherlands
In the Netherlands and everywhere else in the world, you should make business friends with the investor first. If the person feels they can understand your team and your business, if they feel that they’re contributing to your company, then that person is much more likely to invest in the company. Angel investors in the Netherlands want to be a part of the company in every possible way.
Developing a good pitch is also useful because it forces you to be clear on how much you want to say. But you should never let a the static pitch deter you from building a proper relationship. You have to find ways in which an investor can interact with your team, your company, your proposition and the way you think. The best way to approach Angel investors in the Netherlands is to ask them to join your team, have them sit with you and think about your business for a few hours, few days or few weeks. Static pitching is useful for you to reach larger audiences, but the high-quality direct interaction with an investor is really critical.
What Angel investors in the Netherlands struggle with most
There are a couple of challenges Angel investors in the Netherlands struggle with. The first thing is that after a round of Angel investment in a startup, that startup would likely want to raise between half a million and three million from a professional investor. The problem is that this market is underdeveloped, and there are too few follow-on investors.
Another thing, that’s improving quickly but it could be better, is the standardization of contracts. In a place like Silicon Valley, pretty much every shareholder agreement is the same. In the Netherlands, there is a lot of variety, and the country would benefit the standardization of legal structures.
Networking with Angel investors in the Netherlands
Leapfunder Round Table Sessions are probably one of the best events to meet Angel investors in the Netherlands. There are a lot of active investors and good startups in one place, the event is held every month and it’s pretty anonymous – you can slip in and slip out without anybody expecting much from you. It gives investors a lot of time to think so they can start investing at their own pace. Angel investors in the Netherlands also benefit from annual conferences such as Amsterdam Capital Week and accelerators’ Demo Days.