Why we write about this topic:
Funding promising start-ups in high-tech and deep-tech is essential for our future society. This new fund is very promising in that respect.
As Novel-T’s CEO and imec.istart’s program director, Jaap Beernink and Sven de Cleyn can share some of the experiences of the first year of the imec.istart.nl accelerator. In short: much has been achieved, but much more is still to come, thanks to the new 12 million istart.nl Seed Fund.
Before starting the collaboration with Novel-T, Sven de Cleyn already had experience in the Netherlands, thanks to the imec Netherlands at Holst Centre in Eindhoven and the One Planet Research center imec had set up with Radboud UMC and Wageningen University. Because of those achievements, De Cleyn’s Leuven-based parent company, imec, was open to talking about a deeper dive into the Dutch start-up ecosystem. “Actually, we had quite some tooling inside already, including imec.istart. So indeed, it felt right when Chris Van Hoof, my imec-colleague at the OnePlanet Research Center, asked us in 2019 to help them out even further.”
Still, De Cleyn didn’t say yes immediately. “Before answering that question, I said, let’s take one step back and first look at the Dutch ecosystem to see if we can bring some added value and maybe also cater to the needs of those companies and startups that are not catered for yet.” In the two years that followed, imec.istart talked to all the actors in the ecosystem and finally decided that, indeed, they could play a role together with Twente-based Novel-T.
The result was also that imec.istart.nl became even more aware of its own ‘sweet spot’. De Cleyn: “We certainly had the impression that the Dutch startup ecosystem is much more developed than the Belgian. And in a broader sense, the Netherlands is known for creating great start-ups and spinoffs. We at imec.istart typically operate very close to universities and research centers in a very early stage. Exactly when startups and spin-offs are leaving the safe haven of the university, that’s our sweet spot. That’s what we also found out for the Netherlands: in this stage, for that kind of high-tech, deep-tech startups and spinoffs, there still is a need that is not catered for yet.”
For Novel-T, imec.istart was the ideal partner, Jaap Beernink says. “Three years ago, we weren’t considering cooperating with imec.istart at all. We mainly focused on intensive one-on-one support for startups. And we were working on programs to scale up the effort we put into our startups, but at a certain moment, we saw there were also existing programs that could do it even better than our own. And that’s when imec.istart came on our radar.”
Non-profit business model
What also helped, according to Beernink, was imec.istart.nl’s business attitude. “We like to care for our start-ups in a non-profit way instead of a very profitable business model for our own organization. The business model of our customers, the start-ups, is always leading.” University of Twente is a front-runner if you look to entrepreneurship, Beernink adds. “Which is an extra element in the potential success of a program like imec.istart.nl. Starting entrepreneurs are really important for this university and this region. They can translate the knowledge developed at the university to societal and economic value.”
Together, Novel-T and imec want to build on their existing knowledge ecosystem network. “That distinguishes us from all those accelerator programs that are more outside and less linked to a university. Moreover, Novel-T may have a good reputation in the Netherlands, but if you look at imec’s international field, it’s a big name. That’s also a nice thing for us.”
Looking at that international ecosystem, there are some very well-known players in the accelerator landscape: YCombinator, Techstars, Seedcamp, 500 startups, to name a few. Still, Sven de Cleyn thinks imec.istart.nl has a clear advantage: “Our key differentiator is our proximity to a multitude of research and tech talent. None of the others, even the big players, have that so closely together. On top of that, imec itself has roughly 5,000 researchers in-house. Add that to all the expertise at the University of Twente, at TNO, which is also very close to us now, at Radboud University, and some others. With all those scientists and technologies, we can make a big difference for start-ups and spinoffs by lowering the thresholds to get in touch with them. I think that’s where we have an edge – where we can make the difference on a global scale.”
Although Beernink and De Cleyn are more than happy with the new 12 million euro istart.nl Seed Fund, they are also well aware of the international financial perspective. “We cannot compete yet with the big boys on the planet. But it all starts with something small. As they sometimes say in Dutch, we need to box above our weight. So even though we are two very small countries, if you look at it on a global scale, we can reach much more impact than we normally could from such a small country.”
Winter is coming?
Some people claim that “winter is coming” as far as startup funding is concerned. How does imec.istart.nl react to the global economic downfall? “Winter’s always coming,” Beernink says. “Maybe the financial climate will become slightly less attractive in the next few years, but I think if you have a unique proposition and a talented team, money will not be the problem. Also, not in the next year.” De Cleyn goes even further: “What you see is that for early-stage financing, it is still more or less as it was before the war in Ukraine started and before Covid happened. What is becoming much more difficult nowadays is the late-stage growth funding for the investment rounds of fifty or a hundred million euros. And that will still be the case for at least three or four quarters. But the early stage financing is not a problem, especially since many funds have raised additional funding in the past years. They have money to spend, and they need to spend it, at some point, to get a return on that investment.”
The phase where imec.istart.nl plays a role is when a company starts to move away from the grant-driven development within the university walls. De Cleyn: “That is still pre-revenue, so there is not much commercial traction yet. It’s very difficult stage to get private investors interested. We have built a good track record in the past eleven years to show that if you can bring both worlds together, so a bit of public and a bit of private money, and if they join forces in that stage together with us, we can help make a difference.”
The imec.istart.nl accelerator has been active for exactly a year now. It was a bumpy road, Beernink and De Cleyn admit, but also a road with many perspectives. “The future is looking bright”, De Cleyn says. “We feel comfortable that we can build a strong program in the coming years. Of course, I expect some roadblocks and challenges in the future, but we’ll manage to overcome them.” Beernink stresses that no success can ever come without being aware of – and conquering – those bumps in the road. “We always strive to have an even better program tomorrow. We now have a team of acceleration managers doing everything needed to help the startup forward. Every day, every step, whatever it takes. That’s what I like in this program and the joint teams.”
The imec.istart.nl program is now mainly focused at the University of Twente, but that’s not where Beernink and De Cleyn would want it to stop. “We don’t want to turn this into a regional program, so that’s why we want more universities to join. You need all the veins of different universities to be involved in scouting and screening and to give the startups in their ecosystems the best support they can have.” For that reason, imec.istart.nl is also entering into a strategic partnership with the Leiden Life Science incubator Unlock_ and the Leiden Center for Innovation and Entrepreneurship PLNT.
Dare to share – best practices
From their experience, Jaap Beernink and Sven de Cleyn each have clear ‘best practice’ advice for founders that try to build their startups.
Jaap Beernink: “Most important: dare to share! What I sometimes see is that people have the idea only for themselves. Please join the ecosystem to share your ideas, to get other people to become involved or give you advice, and just set the first steps. Involve others, make small steps, get out of the building, and practice and see what works and doesn’t. And after that, please join imec.istart, I would say.”
Sven de Cleyn: “I also see many entrepreneurs trying to overdevelop or overengineer their first product. That’s not wise. Get out as soon as possible to talk to your future users and customers to see what is the minimal thing they would need to open up their wallets and pay for your product or service. And once you have reached that, go to the market as fast as possible because the market will tell you where to go next with your product. What kind of additional features are they looking into, what should you change to your product, and what future product versions should you make? Many engineers tend to make a product 120% perfect before going to the market. 80% is enough. That last 20% will come from input from the market.”
More partners joining the program and a better connection from the program toward new investment rounds – that’s what Beernink and De Cleyn hope for in the next year or so. “I see the imec.istart.nl program as a spider in a web, as part of a big chain,” De Cleyn says. “We are only part one of that chain. That means that by the end of our program, other actors can potentially take over from us. Including investors and corporates as buyers or distributors of the start-up’s product, or in new programs. We will be even better embedded in that entire ecosystem a year from now.” And in terms of concrete results? Beernink: “I think we will have around five new partners on the front side. And quite a few promising startups in our programs will have found their follow-up rounds of investment. That would be, of course, the proof of the pudding: can we align in the front of the funnel, and are we able to align follow-up investment rounds? I think that will be proven in one year from now.”
The imec.istart.nl 2022 Autumn Call is open until November 1st, 23:59.