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Money certainly flows where it is treated well

Sep 15, 2015 2:18:00 PM. By: Hilde de Vocht

Brainport Startup Week 2015

Wow! This past week on High Tech Campus Eindhoven was simply extraordinary. It included visits to The Strip by Dutch King Willem-Alexander, Minister Kamp and StartupDelta Envoy Neelie Kroes all within the space of 24 hours.

It was great to see the startup scene in Eindhoven getting the national and international attention it deserves. We were able to share ideas about why and what we’re doing right, and discuss ways in which the unique ecosystem here can drive change across the entire "West Coast" of Europe.

Interaction between networks becoming crucial

Over 200 policy makers, academics, corporates, VC’s and startups came to an inaugural meeting on Campus last week. The Global Government Venturing Summit turned into a frank exchange of views.

Eindhoven, in-fact the whole Brainport region, has a tremendous tradition for inventions and cutting edge technologies. But the key to how fast success happens internationally will be the interaction between people.

Mayor, Rob van Gijzel, cautioned the conference that we live in disruptive times. It’s easy to rise up the global rankings – but it is sometimes difficult to stay there. "Many people still don’t realize that the wealth of a region is often earned by activities happening outside that region."

There is clearly discussion going on between the various components that make up what the Dutch call the "Triple Helix". Government, academic research centres and large enterprises are good at building strong regional and national collaboration networks within their respective sectors. But the harder yet important challenge is to ensure cross-fertilization across these different cultures.

"We’ve been looking at ways to make the Brainport region not only a smart-region, but a place where the hottest start-ups can scale up and stay-up" says Professor Erik Vermeulen, of the department of business law at Tilburg University.

"Several corporations and recent spinouts have established this region as leading the world when it comes to being innovative and inventive. Following the lead given by Philips in 2003, we’ve witnessed how open collaboration within a trusted ecosystem can rapidly accelerate companies in bringing products to market. But we can do so much more."

"A good start-up climate is one in which there is a balance between exploration and exploitation. As well as research and development, great inventions need to have sufficient time, assistance and access to international funds to scale-up and thus reach a global market. I’m optimistic that we can achieve this. All the elements for success are in place."
Neelie Kroes at Brainport Startup Week
His Majesty King Willem-Alexander visited the Campus for Startupbootcamp HighTechXL on Tuesday, 3 February, accompanied by Minister Kamp of Economic Affairs.
Statupbootcamp HighTechXL HQ.
Neelie Kroes, now Special Envoy for StartupDelta, came to Eindhoven to share three wishes to be realised by July 2016. There is no time to waste.

"My goal is to getting at least one of the large pension funds in the Netherlands to invest in a venture-fund for disruptive startups. Currently the figure is zero. I want to investigate ways to change that, thereby giving startups access to the right funding at the right moment."

"My second goal is that five large foreign venture capital firms have their European headquarters in the Netherlands. Two are already here, actively scouting for investments. We need more of these kinds of VC funds who recognise the global potential for many of the disruptive startups emerging from various Dutch ecosystems."

"I also want to see one major VC event in the Netherlands each year. StartupDelta recently got a visit from Capital on Stage who’ve announced an event for VC’s interested in startups for September 24th 2015. So we’re off to a good start."

One of those VC funds mentioned by Neelie Kroes visited Eindhoven this week.

Ray Quintana is General Partner for the Cottonwood Technology Fund, the top performing early venture US capital fund in the USA for the last five years. He has deliberately set up his European headquarters here.

"I’m interested in the Netherlands as a whole, because there’s an incredibly dynamic ecosystem. There’s just the right mix of disruptive technology and passionate entrepreneurs with the vision to build it. What’s lacking is the kind of service that we provide as a technology fund. We understand the different capital requirements during the life-cycle of young tech companies; companies need capital to get them through the "valley of death". It is very challenging to cover the negative cash flow in the early stages of a startup, before the new product or service is bringing in revenue from real customers. That’s especially true in hardware."

"But, just as important, as a startup you need to have a global vision from day one if you’re serious about conquering a global marketplace. We believe you can’t build a global company without access to the aggregated resources of a global ecosystem. That’s why we don’t try to grow our companies organically from the bottom up."

"Nobody can emulate Silicon Valley. Don’t even try. They invested US$29 billion last year, and that’s just a tip of the iceberg. So, by all means, understand what works in the Valley, but translate and adapt that into your own local ecosystem to make maximum use of what you have available."

For those of us in hardware development, it makes perfect sense to look East as well as West. You can’t scale up your product until you have the supply chain in place – and China plays an important role for many companies in the Brainport region.

Startupbootcamp HighTechXL CEO Guus Frericks made 6 trips to China last year, resulting in a strong alliance with both Chinese startups and investors. If you can scale in that market, you can scale anywhere. Likewise, Chinese startups are looking to tap into our technology as well as understand Western markets. And that network of trust has started to pay off in a spectacular fashion.

In fact it was a Chinese investor, Yu Ming Fang, who really surprised an audience of a thousand people who came to Eindhoven last Friday (6 Feb) for Startupbootcamp’s Demo Day. He signed a €450.000 funding contract for Avular on stage. This startup designs and makes industrial drones for inspection and maintenance. A few minutes later he decided to invest another €600.000 in Manus Machina which makes robotic gloves to turn your hand into a controller and gestures into speech. Perhaps he was inspired by the presentation of Manus Machina including a video clip in which a drone was controlled by their technology.

Dutch startup Star Engines, who make portable charging stations for electric vehicles announced they had received €2 million from angel investor Frans van Gils.

Having three of the 11 hardware startups fully funded with such significant amounts on demo day is unheard of in the start-up world. Congratulations to everyone involved on a supreme effort.

And judging by the smart suits walking around the Startupbootcamp HighTechXL offices on the Campus at the moment, I’m sure there are more announcements coming very soon!

What a great way to end a memorable week!
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Hilde de Vocht
Hilde de Vocht

Marketing Manager High Tech Campus Eindhoven
hilde.de.vocht@hightechcampus.com

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