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‘Personal connection just as important as financial valuation’
Connecting start-ups and scale-ups in Life Sciences & Health with relevant investors and funds. That was the goal of the matchmaking event Healthy Funding IV, which took place on Thursday, February 4, 2021. With a record number of more than 200 matches and shared advice and insights from both perspectives, it was a successful and extremely interesting afternoon.
‘This was the perfect afternoon to make that fantastic match between growing entrepreneurs on the one hand and the funds and investors looking for those growing entrepreneurs on the other!’ Presenter Thomas van Zijl may be sitting at home at his laptop, just like rest of the attendees, his enthusiasm is certainly no less than it was during the previous 3 editions of Healthy Funding, which were held in 2017, 2018 and 2019 in the Life Sciences & Health Hub in the Rotterdam Science Tower.
Also during this fourth edition, the focus is on making matches between young entrepreneurs in need of investment and investors. In addition to the location, there were other differences. For instance, this time there is a co-host: Healthy.Capital investment fund that invests in young, promising Dutch businesses focussed on digital health with innovative solutions. Moreover, the preparations are even more intensive than before. Entrepreneurs had to provide a pitch deck in advance. Investors were able view them before scheduling a meeting. That resulted not only in a record number of 1 on 1 meetings, more than 200 that took place over the entire week following (up to and including February 12), but also more relevant meetings.
Insights from Eline Vrijland-van Beest
Before entrepreneurs and investors meet, they are presented with interesting insights and advice in a talk show. The main guest is the young, successful entrepreneur, Eline Vrijland-van Beest. In 2016, when she was in her early thirties, she sold her start-up, that had developed a product against sleep apnea, for millions to Philips. These days she is CEO of Hybridize Therapeutics, a company that develops drugs against viruses. As partner of BlueSparrows Medtech Fund and venture partner at Thuja Capital she also sits on the other side of the table, and can see things from the investor’s point of view.
‘Don’t fall too much in love’
Eline says that she is looking for investors for a drug she is currently developing. An interesting, but at times difficult process, she says. ‘In the coming two weeks I may have to give the same presentation about forty times. I know I have to expect setbacks, that it’s easier for doors to stay closed than to open. Yet you have to keep the faith. You only need to find one investor. It is important not to fall too much in love with your own product. I believe you should always be a little insecure. That keeps you sharp and ensures you constantly check whether your product really meets the needs of the market..’
Handing out advice
In conversation with the ever-sharp Thomas, Eline hands out advice and insights. She talks about the importance of a good team and a good network (‘if you can drop a good name, you make ten times more chance of getting an invitation’), the importance of a good exit-strategy (‘if you, as an entrepreneur, can present a plan for this, investors will be more inclined to get on board’) and how much information you should give investors (‘don’t let them see your entire data room right away, but give them enough information to make a well-considered decision’). She saves her best advice for last: ‘I think a personal connection with the investor is extremely important. Perhaps even more important than financial valuation or terms.’
1 percent chance of success
The importance of the personal connection is emphasised by Douwe Jippes, managing partner of co-host Healthy.Capital. ‘As an entrepreneur you lean heavily on investors, especially if, like us, you start collaborating in the early stages.’ Reaching a deal is not guaranteed, as the figures Douwe mentions show. ‘In the three years we have been around, we have spoken to 700 companies. We have invested in seven of them. That is only one percent. On average, there was a year and a half between the initial contact and signing the deal. That is because there are limited financial resources for health care in the market and because we advise start-ups and scale-ups to remain independent for as long as possible and build value first.’
Take a back seat
The fact that it doesn’t have to take so long, is illustrated by the story of Charlotte van Slobbe, director of De InvesteerdersClub (Investors Club). This organisation brings entrepreneurs and informal investors together. In the very early phase, with amounts between 50,000 and 350,000 euros. ‘But it can take up to six months for the money to be transferred to the account. Because you must get to know each other first and make solid agreements, about finances, but also about involvement. We always say: as an investor you take a back seat, the entrepreneur is at the wheel. That is sometimes difficult, if it’s your money. But if you get on board, you must have faith that the entrepreneur is steering the bus in the right direction.’
That is further emphasised by Sterre Witteveen, Investment Analyst with Holland Capital, that according to her, invests in ‘both very young and extremely old companies’. When asked by Thomas whether the latter is a good idea, Sterre replies. ‘Definitely! As long as there’s growth or potential in a company. There are three things that I personally find important: What is the problem? How can you solve it? And, also very relevant: Who is in the team? If that’s all ok, we’ll have a cup of coffee. If there’s a connection, we will ask for more information and talk some more.’
Healthy Funding V
Sterre’s story segues nicely to the pitch decks, for which entrepreneurs have to submit those same points prior to the event. That resulted in over 200 matches, for which a whole week was scheduled. ‘Hopefully a lot of seeds will be planted,’ concludes presenter, Thomas van Zijl, who is already looking ahead to Healthy Funding V, on November 18, 2021. ‘I look forward to hearing whether the seeds are slowly beginning to come out!’
With Healthy Funding the municipality of Rotterdam wants to encourage and further develop good entrepreneurship in the region. Of course we do not do it alone. This time, Investment company Healthy.Capital was co-host. Other partners were: Borski Fund, Blue Sparrows MedTech Fund, CbusineZ, EIT Health, De InvesteerdersClub, ErasSupport, Holland Capital, Health Innovations, Hezelburcht, Holland US Bridge, Health Investment Partners, Kaasstad Kapitaal, NextGen Ventures, Rabobank, Subsidycloud, Symbid, Swanbridge Capital, UNiiq, VanPaz and 4impact.vc. The fifth edition of Healthy Funding – an international version! – is planned for Thursday, November 18, 2021. You can register now via email@example.com.
Date: 12 February