Entrepreneur, globetrotter, and investor are all definitions that suit Victor Straatman well. After studying at the Technology University of Delft – and taking the only back then available program for entrepreneurship – he relocated to New Zealand, where he worked for a few years. In 2004, he returned to the Netherlands and founded the digital agency Redkiwi. Ten years later, he left for another overseas experience and worked as a startup mentor in Vancouver. During his time in Canada, he founded the regenerative agriculture startup Meatme.
Why this is important:
If startups are the ones developing the solutions to the challenges of our time, they need the right support. Yet, investment funds must be committed not only to profit but also to the wider societal impact of startup innovations.
Earlier this year, Straatman became a partner of The Hague-based 4impact capital, a venture capital (VC) fund financing impactful companies working on digital technologies. The VC is active in the early stages of funding—in seed to series A—and as it launches its second fund, it will invest in Benelux DACH (Germany, Austria, and Switzerland) and Nordic companies, too. Solar Monkey, which developed software for solar panel installers, and EV-charging software developer Deftpower are two Dutch companies in which the VC invested.
Straatman was one of the speakers invited to share his insights on one of the stages of the Upstream Festival, a startup event organized in Rotterdam by UP!Rotterdam and partners.
During your session, you talked about how businesses can strike a balance between impact and profit. In your opinion, when are companies making an impact?
“It’s on multiple levels. First of all, it needs to be driven by the intention of impact, so the company founders’ impetus is to make a difference. Secondly, there is a correlation between impact and the organization’s top line. In other words, the more revenue it generates, the more impact it has. Being able to measure the impact gives the significance of a given organization.”
What aspects do you look at when investing in a new company?
“In the basics, essential elements characterizing the companies we invest in are their impact, digital technology, and the team. When we look at the business itself, the first thing we look at is the team: who the founders are, what their skill sets are, their values, and ambitions. We are looking for founders with a vision and the desire to scale across borders.
Then, we check the business model: can it generate both an impact and profit? Obviously, we scrutinize the technology to see to what extent it is unique and defensible and who the competitors are.”
Why is team motivation so important for you?
“Typically, we invest in the early stages of a company. At that point, there is often some commercial traction, and the startup might already have the first customers, yet the technology still needs to be fully developed and might work only in one country. At that stage, the grit and the willingness to find new solutions and bring the company where they want to is crucial.”
A recently published report showed how Dutch companies grow four times slower than US ones. What is missing there?
“That slowness mainly depends on the availability of capital. Compared to when I started, the Netherlands has developed a lot in terms of the innovation ecosystem. More capital will help companies grow. I see that more capital holders are stepping in, but we need more. Groups like ourselves at 4impact capital are available and provide different options for capital to enter the market.”
Yet, pension funds are stepping in more.
“Pension funds’ involvement is a good sign. However, their ticket sweet spot is typically above €100 million, whereas most VC funds can take single double-digit tickets. There is still a bit of a gap to bridge for pension funds to invest in VC.
Besides, as a country, we need to work to build the innovation ecosystem further by connecting founders, for instance. In other ecosystems, a support structure is present. It also takes a cultural shift; in the United States, failing makes you stronger, and here it is more of a negative checkmark. It will take time and patience.”
4impact capital invests in software companies. What trends do you see in this domain?
“Digitization is a huge opportunity. More data is becoming available and can help optimize many resource-intensive processes. The future is bright. As a fund, we are working towards the close of our second fund after the summer, targeted at €75 million with a €100 million hard cap, over four times larger than our first fund. To this extent, we are also experiencing an acceleration.”
What motivates you the most in your job?
“I love my position, especially operating at this early stage when companies are built and start growing. That’s where 4Impact and I can add value. I’m happy to spend time working with companies that make a positive impact and help them accelerate. We are an active investor, so we are actively involved with the companies we invest in, connecting them with other industry players to help them accelerate growth.”
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