Innovation Origins goes more in-depth. As of today, our journalists will regularly – in addition to our usual news on innovation and technology – be examining important topics for a week. Our first dossier is about female start-ups. Read all the stories here.

More on this Dossier
This dossier on women-run start-ups was created by Erzsó Alföldy. It is supplemented with articles by other authors at Innovation Origins. Erzsó explains why she wrote this dossier:  It is not so long ago that Dutch women had to stop working once they got married and started having children. While my own single mother had to work full-time and even six days a week in my native country, communist Hungary in those days. The fact that she also worked in a technical profession would be highly laudable from an emancipatory point of view. However, my mother didn’t like that at all – no more than many Dutch women did who were forced to waste their time at home without being able to develop their talents and without any prospect of economic independence. Ultimately, what matters is that you have a choice. And that the preconditions are in place to be able to make such a well-informed choice. Which goes further than just equal pay – however important this may be. It’s about equal opportunities for women and men. And it’s not just about who is appointed, but also about the underlying structures. Why is this important? Besides the value for women themselves and the economic importance of ensuring that female talent is not overlooked, it has also been proven that greater diversity benefits organizations.

Pioneering women

I am continually fascinated by women working in such traditionally male-dominated work environments. How do they do it, how do they manage to hold their own? I made a series of portraits of female scientists once for Opzij (Dutch feminist magazine) as part of the Westerdijk Anniversary celebrating the appointment of the very first female professor one hundred years earlier. Over the past two years, I have also interviewed women working for Intermediair (Dutch weekly for educated professionals) in occupations that were previously reserved exclusively for men: from football international player, forest ranger, helicopter pilot in the Dutch Air Force and captain of inland shipping to cardiologist, police chief, ambassador and Member of the Dutch Senate. Although there has definitely been a shift within many professions in recent years and things are much more taken for granted by the younger generation than by the generation before, I take my hat off to the courage and perseverance of all these women.

Entrepreneurship for women

Entrepreneurship: another professional field that is still commonly associated with men. Even though women are not necessarily better but are certainly no worse as entrepreneurs than men, as is shown by research and in practice. Yet the bulk of venture capital is still invested in start-ups run by men. Why is this? What underlying mechanisms play a role here? And above all: what needs to be done in order to change this, to close the gender investment gap? Finally: what are the experiences of female entrepreneurs themselves? For Innovation Origins, I took a tour along various initiatives aimed at linking venture capital to female entrepreneurial talent. I also spoke to the founders of a handful of female start-ups with a wonderful and diverse range of products and services. From energy-generating facade panels and a search engine for sustainable clothing brands, to a platform for finding the right artist and another one that provides knowledge and networks to other female entrepreneurs. A fascinating experience that deserves a follow-up!

When you say female entrepreneurship, you say Simone Brummelhuis. Brummelhuis is not only the founder of TheNextWomen, but recently also co-founder and director of the Borski Fund, a capital investment fund focusing on female start-ups and scale-ups in an advanced stage in search of risk and growth capital. Is the start-up in question not yet that far along? No problem. It’s still important to keep it in the loop.

A start-up must meet a few conditions to qualify for financing. It must have at least one female founder and entrepreneur who owns at least 5 percent of the shares. Annual turnover must be a minimum of 500,000 euros and there has to be sufficient potential for further growth. The company must also contribute to the objective of the fund: reducing inequality. Finally, the head office has to be in the Netherlands.

With a budget of over 21 million euros, the fund has quite a bit to spend. The intention is that with this amount, 10 to 15 companies can be further developed over the next five years. But the fund is “growing business” and the original budget is steadily increasing. And that is good news for the fund, which was kicked off on 31 October in the presence of Queen Máxima of the Netherlands and the director of De Nederlandsche Bank (the Dutch Central Bank – DNB), Klaas Knot.

Gender issues in the spotlight

Gender issues, from the #MeToo movement to the discussions on women’s quotas, equal pay and now the investment gap, are currently in the center of attention. Is this a case of having the right timing?

“You always need pioneers to pave the way. These insights were around ten years ago, when there were also all kinds of reports on the subject. With TheNextWomen, we have been on the front page of the Dutch daily newspaper Financieele Dagblad (FD) several times. And it’s true, at that time the problem was a lot less visible. But when many people start paying attention to the same problem who all think something should be done, you suddenly reach a tipping point and the ball starts rolling.”

“As early as 2010, we started with TheNextWomen linking female entrepreneurs not just to capital, but also to business angels and informal investors who put their own private capital into a company.”

Advice and action

“In 2014, we set up a start-up fund with 75 female investors with a budget of 1 million euros to help 30 female entrepreneurs get started. We also linked them to other investors and assisted them in both in word and deed. We also organized all kinds of pitch events very quickly.”

“However, the demand for growth capital wasn’t as great then as it is now. In the meantime, it has grown many times over. By 2018 the investment demand had grown to 140 million euros! Our fund was too small for that so we needed to increase its size. Last year, the time had come to take the next step. We launched a program in June 2019 to bring entrepreneurs together with banks for their loan requirements. Then Laura Rooseboom, director of StartGreen Capital, and I launched the Borski Fund in October 2019.”

Where does the investment money in the fund come from?

“The original 21 million euros was raised by the three major Dutch banks ING, Rabobank and ABN Amro, each in the amount of 5 million euros, supplemented by money from Van Lanschot Bankiers and investment capital from family offices and 22 private investors, both men and women. These investors are often men who have children of their own, for example, daughters studying at a technical university. This suddenly makes them think: Hey, how will things work out for my daughter once she has finished her studies?”

Photo: Borski Fonds

“The best thing would be if at some point the government stepped in and put money into the fund. But as Queen Máxima (who advocates on behalf of the UN on inclusive financing and development, Ed.) pointed out during our kick-off event, this is not yet evident in the Netherlands, in contrast to other countries such as the UK and the U.S. This is because the Netherlands, like the EU, has no target group policy in politics. I also encountered that issue with TheNextWomen. This contrasts with the UN, which has established women’s rights and the empowerment of women as one of its Sustainable Development Goals (SDGs).”

What kind of businesses are you targeting with the Borski Fund?

“We look at innovative companies and ask: where are they? You soon discover that it’s all about subjects with a female touch, such as innovative or sustainable solutions in the field of work and HR, education, health, care and fashion tech, but also products aimed at the female body. These are topics that are often not immediately understood by male investors. But we are also seeing more and more deeply technical innovations. A lot of good things are happening. It is also important that innovations be stimulated by women. After all, in the end it’s an interaction: If there’s no money available for it, they won’t enter the market, either.”

What do you want to achieve with the fund?

“We’re getting more and more name recognition. PhDs from Delft University of Technology, Eindhoven University of Technology and Wageningen University are now also finding their way to us. We are receiving more and more applications for funding. But even if a start-up isn’t ready yet, I can always send them to the team at TheNextWomen. There they get a little more support, for example, when writing their business plan.

What do I really like about this model? That you don’t have to turn people down. You can say to them: Do this or that, and then come back. At least that way they stay in the loop. That way you build a relationship of mutual trust. Such a relationship of trust is very important when making investments. After all, by investing in the shares of a company, you also form a business relationship with each other. Entrepreneurs who are successful will soon become angel investors.

It is important that there be more angel investors, because they form a layer between start-up companies and the large funds. These are often entrepreneurs who started their own business in this way, but in the meantime have sold their company and invested money in other start-ups. In this way you create an ecosystem, also for the next generation.”