Matching investors with sustainable start-ups

On 5 November 2018, ABN AMRO organised the Sustainability Pitch Day for the fourth year in a row. The event offers a platform for sustainable, circular and social enterprises looking for investors or knowledge partners in order to grow. The participants present themselves to ABN AMRO’s investor network, made up largely of current and former entrepreneurs who want to use their assets and experience to help support young entrepreneurs with a solid, sustainable business plan.

Linking investors with sustainable entrepreneurs

Investment Manager Gerard Knaack is closely involved with sustainability and start-ups in his job. He says, “There are so many good ideas out there which definitely deserve to be implemented. But it’s not always easy to launch a new idea or grow after a successful launch. Our team acts as an intermediary between start-ups and investors who have indicated that they want to contribute to sustainable initiatives. Sometimes that’s through investment. Sometimes it’s by making their knowledge, experience or networks available. Often it’s a combination of the two.”

Embracing a sustainable mission and making a profit

One of these investors is Paul Citroen. He regularly invests in start-ups pursuing a sustainable or social objective, some of which have come to his attention through ABN AMRO’s network. Citroen says, “I invest in a student employment agency called StudentTalent, and in Saint Basics, a manufacturer of organic underwear. I try to contribute by showing how an entrepreneur can carry out a sustainable mission while still turning a profit. Believe it or not, they’re mutually reinforcing objectives. Green ambitions are of no use at all if there’s no solid business plan in place, since you won’t make any money or have any impact. The two have to come together.”

“Not being the only investor”

As an investor, how do you know if a particular start-up is a good match for you? “Asking critical questions is important,” Paul says. “How sure-footed is the entrepreneur? It’s OK not to have all the answers. I’m not a fan of glib introductions. I’d much rather work with people who are honest, so we can figure out together how to bring in the extra knowledge we need.” In some cases, Paul is the right person, given his financial background. But he says he never wants to be the sole investor in a venture: “It’s too risky. I’d prefer to sit down with five entrepreneurs. That way, we all complement one another’s expertise and have a healthy, meaningful discussion.”

Pitch: Ronald van Bemmel – Softs “Our investors work with us as partners”

One of the entrepreneurs who pitched is Ronald van Bemmel of Softs. His business develops mini-power stations, called Softs Points, which allow businesses to generate their own energy, as well as filter air and water. According to his business model, companies install a Softs Point, and the proceeds are then used to sponsor local community and sustainable initiatives. Van Bemmel thus hopes to contribute to the acceleration of sustainability at the local level through organisations like sports clubs and schools which lack the necessary resources to do this themselves. Van Bemmel’s company installs the Softs Points free. Ten per cent of the savings goes to Softs, and the rest is earmarked for local sponsorship. All that requires investment. 

Van Bemmel says, “The benefits of Softs are two-fold. The companies which install a Softs Point consume less energy and contribute to the sustainability of their own communities. There’s been a lot of interest both here at home and outside the Netherlands, which is fantastic. After all, the more Softs Points, the greater the impact! In order to remove the entry barrier, we fund the points ourselves. That costs a lot of money – in fact, we’re looking at a figure of EUR 3.75 million to cover all current applications.” 

Although it’s a considerable sum, it hasn’t put off investors. In fact, at the end of van Bemmel’s short pitch, one investor expressed interest right away. And within just one month, he had all the money he needed to proceed. Van Bemmel says, “It’s a wonderful feeling. That’s why we do it, right? But it’s not always easy finding the right match. Fortunately, we’ve already found several matches thanks to ABN AMRO’s network. At the beginning, it’s important to have an investor who really believes in what you’re doing. After that, things often get easier – but that’s not a given. That’s why I’m thrilled to have found another match. The EUR 3.75 million puts us one step closer to meeting our goal. The best thing, though, is that most of our investors are now working with us as partners. They actually work for Softs or sit on the advisory board which we brainstorm with once a month. For me, that’s the ideal collaboration.”

Pitch: Frank Bokhorst – GRO Mushrooms “Be smart about how you collaborate”

GRO Mushrooms is about growing mushrooms as a meat substitute. The business model originated in Zimbabwe. GRO founder Jan-Willem Jansen and his wife decided to grow mushrooms on agri-waste in order to feed the children at their Zimbabwe-based orphanage. The model has since been launched in the Netherlands. GRO currently grows oyster mushrooms on waste coffee grounds and sells them to the Dutch restaurant chain La Place or uses them to make products like oyster mushroom burgers or bitterballen (a traditional meat-based snack). The new meat substitutes will also be hitting the shelves of Dutch supermarkets this year. GRO is now looking to expand beyond the Netherlands, a move which requires capital – EUR 500,000, to be precise. The business places value on who the investor is, says GRO’s Commercial Director Frank Bokhorst. “It has to click,” he says. “Not all investors understand the dynamics of our business. We’re not making cars here. Investors have pulled out in the past because they find our business model too complex.”

Despite this, Bokhorst says that getting funded isn’t the problem. “Finding the right combination of knowledge, skills and financial resources is more difficult,” he explains. “That vital combination is of more use in the medium term. A foreign investor with an international food network would be ideal, since that would allow us to benefit from a logistics network or a new distribution channel.”

Since his pitch, Bokhorst is now in talks with potential investors. He says, “I notice they’re keen to make the food chain more sustainable, and that’s new. Slowly but surely, issues like circularity and the protein transition are growing in popularity. I call it “the new Internet”. It will take a lot of money to make the food chain more sustainable, but investors also know there’s a lot of money to be made. Sometimes it just takes the world a little more time to see these things.” Bokhorst says he doesn’t necessarily see this as a problem, though: “If a trend doesn’t catch on right away, you just have to be smarter about how you collaborate. After all, there’s more than one road to the top.”

Pitch: Sandra van Beest – The Social Handshake “I’m collecting investors and coaches”

We all want to make the world a better place, but it can be hard to know where to start and how to make the greatest possible impact. For Sandra van Beest, this feeling intensified after she became a mother. She went on to develop The Social Handshake, Payroll Giving – a tax model that allows employees to donate a portion of their salary via their employer to make a double impact.

“This is my first start-up, so it’s all very new and exciting,” says Sandra. “We’re now in our first round of investment and will launch in early 2019. We need EUR 550,000 to fund the pilot project and roll-out. We’re lucky in that word is spreading fast. Plus it helps that there’s an overall feeling that people want to do more for the world. Lots of people out there recognise themselves in our branding and want to contribute. Sometimes I meet people from companies which may not be able to help us financially, but who turn their entire network inside out to see who else might be able to.”

Van Beest’s pitch resulted in discussions with three potential investors, one of whom is now funding part of the Social Handshake pilot project. “A platform for experienced investors, like this one, is a huge help,” she continues, “not just in terms of funding, but also advice. Some approach investments as a CFO, while others have more of an impact perspective. That’s so valuable when your very first business is in its launch phase.”

One piece of advice Sandra got was about developing natural resilience. “I get that,” she says. “You have to know how to pick yourself up again after a setback. Success is as much about raising capital as it is about surrounding yourself with the right support. That’s why I’m hoping to collect not just investors, but coaches, too.”

Looking for investors? Or a sustainable investment?

Visit informalinvestment.nl or contact ABN AMRO’s Informal Investment experts. Gerard Knaack – gerard.knaack@nl.abnamro.com