Don’t let innovation leak The engineer

Starting a business is good in the Netherlands, and there is a lot of support from the government, but if you want to grow, it is difficult to find investors, says Irina Pakhomova.

Irina Pakhomova (Ukraine) Serial entrepreneur living in the Netherlands since 2016. An entrepreneur by training, she is currently CEO and co-founder of Dutch technology company Nurtio Technologies. She also advises technology startups and other non-profit organizations.

As an entrepreneur of immigrant origin who is currently scaling up a Netherlands-based company, I can honestly say that this is definitely not an easy task. While I spend 25 to 30 percent of my time as a founder dealing with different aspects of… compliance And administrative accountability, the biggest challenge facing us so far is the difficulty of obtaining growth capital.

Years ago, when I founded the company, I was impressed by the Dutch system of government support for start-up entrepreneurs. Yes, it took some time, but we were lucky to be able to fund the first (and riskiest) phase of our project through a very generous government support system. But as the company started to grow and needed more and more capital, things became very difficult.

And in many other countries Pre-seed– until seedThe stage usually covered Angel investors And their unions and investors. But in the Netherlands, the first group is unfortunately very small and disorganized – perhaps due to the lack of large groups Exits (Investment monetization). The second group, with some exceptions, functions mainly as Private equity – Whether in terms of risk-averse behavior or desired control over the company.

This forces companies, including my own, to look abroad for growth capital. For example, we do a lot of business in the US, and my company is often approached by US investors who like what we do and want to be a part of it. No investor there asked for a ten-year financial forecast or a fifty-page business plan. As long as it makes overall sense and the founders seem to know what they’re doing, they’re in!

from another planet

But here comes another challenge. American investors are accustomed to the “simple and effective” approach, and tend to look at European companies as if they were from another planet with all our rules and regulations. So they gladly offer their money, but with only one important condition: the entire company must be based in the United States.

Then, as an ambitious Dutch tech entrepreneur, you are faced with a difficult choice: either stay “at home”, limit your ambitions and grow organically, or transfer the entire company, including all the patents created, your team, yourself and all Families. concerned, to a completely different country.

In other countries, investors receive tax benefits

If you decide to take the risk, the first party that loses the most from all this is the Netherlands, a country that has invested taxpayers’ money in stimulating innovation, but has not been able to keep the company with all its future contribution to the Dutch economy.

If we look at how other countries are dealing with similar challenges, we can learn a lot. the EIS/SEIS regulation For example, the United Kingdom is a good example of how the government can stimulate private investment in technology start-ups. Investors receive significant tax benefits as a reward for investing in “risky” startups.

Perhaps it is an idea that we can imitate in the Netherlands, just like other activities to stimulate venture capital investment. It should also become easier for Dutch companies to attract investment capital from abroad.

Editorials – Shutterstock. Photo of Irina Pakhomova

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