Access to capital for innovative businesses with growth potential is essential to the growth of the economy and employment.
Money is available, but supply and demand in the capital market often have difficulty finding one another. Entrepreneurs may, for example, be unfamiliar with schemes and funding bodies or may not be on the radar of banks and other investors.
Brainport Network is tackling this mismatch in the capital market.
Action lines within the Capital theme are:
- Improving access to capital for scale-ups and growing companies;
- Gaining exposure for rapidly growing companies with the aim of mobilising support and attracting national and international capital;
- Connecting financial networks that complement and strengthen each other.
Under Brainport Network a groundbreaking cooperation has arisen in the form of what are known as financing committees. Here, diverse market parties come together to seek solutions for companies that have run aground in their search for funds. Among the committee members are the three major banks ABNAMRO, Rabobank and ING.
The Scale-Up Dashboard is a Brainport Network instrument that identifies rapidly growing companies in Southeast Netherlands. The dashboard’s target groups are organisations that support business development and potential investors. Internationally, too, the dashboard is putting Southeast Netherlands in the spotlight as a region with investment opportunities.
Network approach to capital market
Brainport Network connects networks in the capital market and organises meetings where demand and supply meet each other. For example, since mid 2017 Brainport Network has been a partner of the TechShare programme run by Euronext, which aims to put more technical and engineering companies with strong growth in touch with the financial markets, with a view to an initial public offering.
The SME-plus facility is a financing facility intended specifically for rapidly growing SMEs. It has been developed by North Brabant province, the Ministry of Economic Affairs, the European Investment Fund (EIF) and the European Investment Bank (EIB). Brainport Network is closely involved in setting up the facility and developing its portfolio.
What are they?
Under Brainport Network a groundbreaking cooperation has arisen between the three major banks ABNAMRO, Rabobank and ING, regional development agencies, government agencies, the Netherlands Enterprise Agency (RVO.nl), investment funds and alternative investors. In what are known as financing committees these diverse market parties apply themselves to seeking solutions for companies that have run aground in their search for funds. Their main focus is innovative businesses with growth potential. Three financing committees are now active, one in each of the following regions: Brainport Eindhoven (since 2015), Agrifood Capital (since 2016) and Midpoint Brabant (since early 2017).
How do they work?
Committee members – working to integrity agreements – openly bring cases to the table: their own customers or business relations. Sometimes these parties themselves join the group to explain their expansion plans. The financial professionals then study, in a multidisciplinary approach, what steps may help the entrepreneurs to secure investment. They give advice and make available their shared network. Initially, it is often a case of making the company ‘investment ready’. For example, by refining a business plan or getting particular knowledge and expertise on board – whatever is needed. If the proposition is already in place, it is the role of the financing committee to steer the business through the complex landscape of financing. Occasionally a committee member may step up as financier. Usually this would involve a stack financing construction, where several parties participate in order to spread the risk.
What lies ahead?
Working with the example of the three financing committees now active in North -Brabant, Brainport Network is working on a similar concept for Limburg and West Brabant. And the concept is spreading to other regions in the Netherlands. At the same time, Brainport Network is working to connect all the committees and pool their experience – with a view to creating one large accessible financial network of significant value to industry.
Marcel Vos, account manager SME financing Netherlands Enterprise Agency (RVO.nl) sits on all financing committees on behalf of RVO.nl.
“To entrepreneurs I would like to say make full use of the financing committee instrument as a critical sounding board and to expand your network. There is always added value to be gained from participating. Approach a committee member and ask for a prominent position at the table! Conversely, I’d like to call on account managers at banks and intermediaries to take action: register entrepreneurs for the financing committees and build good customer relations using this option as one of your tools.”