Why we write on this topic:
A lot of groundbreaking innovations stem from universities. A venture capital fund like RoundOne can help to ensure that more of these innovations reach the market.
Round One Ventures is a brand new venture capital fund based in the south of the Netherlands. What makes this fund so special? It is run entirely for and by students. “We focus on students whose start-ups are in the very early stages. We want to help them progress and stimulate innovation in the region that way,” says Cas Verstappen, community director at Round One Ventures.
Universities and colleges are encouraging students more and more to explore entrepreneurship. Students work on hands-on challenges as part of their studies and can thus come up with good ideas that they can flesh out within a start-up. “Then you shift from an educational environment to real life, which is a difficult step. Particularly when it comes to building a network and finding capital in order to grow, it’s quite a challenge for students,” Verstappen says.
The start-ups and spin-offs of the Eindhoven University of Technology
The Eindhoven University of Technology (TU/e) in the Netherlands is a breeding ground for new ideas that draw on scientific research. Sometimes these ideas evolve into spin-offs and start-ups. This brings scientific research one step closer to wider society. In cooperation with The Gate and the TU/e, Innovation Origins puts an innovative company in the spotlight each month that stems from scientific research. This time: Round One Ventures.
You can read the other stories in this series here.
This is something the initiators of Round One Ventures ran into themselves a year and a half ago. They wanted to set up a start-up as students, but network and capital remained difficult issues. “That’s how the idea arose to start a venture capital fund of their own. At first these were mostly wild plans. The initiators asked around a bit on LinkedIn if people were willing to invest, which was just to test the level of enthusiasm,” the community director says. “Until someone actually did agree to invest. That was the moment that we needed to become more serious and attract other investors as well.”
Major entrepreneurs make investments
Since then, the fund has found a number of investors and the students have 1.2 million euros at their disposal to invest. Most of the investors are successful entrepreneurs from the region. In addition, BOM and TU Eindhoven also invest in the fund. The management board of Round One Ventures has been expanded to five students from several knowledge institutions including Eindhoven University of Technology, University of Tilburg and JADS. All of the directors of the fund do this alongside their studies. “We are now ready to make our first investments. We are already in discussions with several start-ups for this,” Verstappen says. He anticipates that the first investment will take place this year.
Round One Ventures caters to student start-ups that in the very early stages. Three main requirements apply here: the founders must be students or recent graduates, the product that they are developing must be scalable, and there has to be a technological component. Several funding options are available. The first of these in the form of a five thousand euro voucher. Students can use this to easily and quickly purchase much-needed materials such as software for their business. A convertible loan with an amount between 25 and 75 thousand euros is also available. Over time, the loan is converted into shares as the company grows.
Opportunities for students and the region
What makes Round One Ventures different from other venture capital funds? “We sit in the lecture hall benches with the student entrepreneurs, which creates a bond and makes contact between each other very low-key. That is what enables us to make a difference. Other funds often have more and stricter requirements. We really focus on students who are just starting out. There are a lot of extraordinary and smart innovations there that deserve a chance,” the community director states.
With their fund, the students want to foster entrepreneurship and innovation in the region. “Here in Brabant, we have a technical university and there are also several large companies. That opens up opportunities, especially for students who want to set up a start-up,” says Verstappen.
Aside from providing capital, the founders of Round One Ventures also endeavor to build a network to help student entrepreneurs advance further. “Of course, the university also provides coaching in entrepreneurial ventures, for instance, through The Gate. What we are doing with Round One – connecting students with each other and with companies – can serve as a good complement to this,” he explains. This is something that Verstappen himself finds most valuable about his work: “I know how difficult it is when you want to set up a company from scratch when you are a student. Which makes it all the more special that I can do my bit for the group of student start-ups in Brabant this way.”