There is a myriad brilliant ideas in the water sector. But the big question is how to turn ideas into promising business models and attract private financiers. That is where the Investor Readiness Programme comes in, with the Netherlands Water Partnership (NWP) as one of the initiators. The Programme connects start-ups and investors, and helps start-ups define their financing need and learn more about the world of investors and financing structures. And financiers are offered valuable options to fill their investment pipelines. The 2022 Investor Readiness Programme successfully connected 10 start-ups to a network of over 50 financiers and investors.
The Investor Readiness Programme is a collaboration of the Dutch Top Consortium for Knowledge and Innovation Water Technology (Top Sector Water), Financing Table Water Technology, Wetsus, and Netherlands Water Partnership. The Programme was designed to accelerate the number of SME financeable propositions, especially on technology and water tech, in the Dutch water sector. After two consecutive years of running the Programme, its success is evident. In 2022, the matches made during the Programme have led to all the participants having follow-up meetings with investors and/or potential partners scheduled.
Thanks a lot for the great programme. I think it is of great value for those who are preparing for conversations with investors, especially because the feedback comes from investors and from coaches.
Jan Pieter van Tilburg, Business Director at Nature's Principles, explains why they joined the Investor Readiness Programme in 2021. “We are establishing a novel production process that will enable the more sustainable and cost-effective production of polylactic acid (PLA) as an alternative to conventional petrochemical-based plastics. Using the raw crop instead of refined feedstocks, the patented process can significantly reduce production costs, which will reduce the price of PLA and reduce its price differential with traditional oil-based plastics. The environment also benefits. Using European sugar beet as feedstock instead of cane sugar means a 20 times reduction in irrigation water. Furthermore, our process reduces CO2 emissions and energy use by at least 10 percent compared to the traditional production process. Our technology has been proven at lab scale. The next step is a pilot in a factory setting, the necessary phase before building a commercial plant. The phases thereafter will require raising sufficient funding.” NWP was able to help Nature's Principles with this through the Investor Readiness Programme.
SHIFT Invest is a Dutch venture capital fund that strives to create impact. It believes that innovative and mission driven start-ups are well positioned to bring about the urgently needed change, guided by the United Nations Sustainable Development Goals (SDGs).
Koen Hooning, Investment Manager at SHIFT Invest says that “We want to support relevant companies at an early phase where regular bank financing is not yet feasible. We offer support and are prepared to take risks, providing they have a promising technology, a strong team and a clear plan. We are mainly looking for proprietary technology that cannot easily be replicated. We also want the companies to be scalable and generate a positive impact. That makes it interesting. Nature's Principles ticks all these boxes.’
Van Tilburg acknowledges that it is not just about smart technological solutions, but that good entrepreneurship is just as indispensable. “We have agreed that we will further refine our business model. It's already solid, but we are working hard to make it even better. A realistic and promising business model is also important to the financiers that support us.” Hooning adds that “Eagerness to learn and the flexibility to change course, if needed, can be key for success in the long-run. We often say that entrepreneurs prove themselves at this stage if they manage to take the right steps with limited resources.”
Our goal was to meet investors and stakeholders, and I am happy to say we achieved this goal!
Slow Mill Sustainable Projects
For SHIFT Invest, the Investor Readiness Programme co-hosted by NWP is a great way to see what's going on in the water sector, and then to identify companies that are of interest to them as investors. And, emphasises Hooning, “It has to be a mutual match, that's why it's good that we meet each other. If it clicks, we'll talk further. At the last meeting of the Programme, where the start-ups and scale-ups presented their pitches to us and other potential financiers, this was the case with two companies. One company works on injection moulding using recycled plastics, and one company works on a biodegradable alternative for the PET bottle. Our contact with Nature's Principles was already made at an earlier meeting.”
Van Tilburg concludes that “The last Investor Readiness Programme meeting delivered promising leads and SHIFT Invest had already invested in us as part of its TTT fund. The Programme addresses a real gap in the market and is proving to be highly relevant for both companies like us and investors working in the water sector. The day was important in cementing our connections and was way more efficient than cold calls. Nature's Principles is ready for the next step, thanks to the investors who are convinced of the strength of our concept. We will conduct the pilot and after that continue on our path towards upscaling production. Our goal is that the first commercial scale factory in Europe will be operational within the next few years.”
The Investor Readiness Programme is a collaboration of the Dutch Top Consortium for Knowledge and Innovation Water Technology (Top Sector Water), Financing Table Water Technology, Wetsus, and Netherlands Water Partnership. The purpose of the Programme is to enable SMEs to attract private finance.
The Netherlands Water Partnership and Wetsus executes the Programme. As such, NWP was involved in the recruitment of participants and trainers, promoting the Programme, organising the masterclasses and financing tables, and facilitating follow-up connections between participants and financiers. NWP reached out to its network of investors, venture capitalists, business angels, and private equity funds to make the connection with start-ups and scale-ups involved in the Programme.
Organisations in the Programme can join masterclasses given by financial experts and experienced entrepreneurs on finding the right financier; creating a viable financial proposition; boosting international entrepreneurship; and, enhancing a pitch aimed at investors and financiers. The Programme also offers 1-on-1 guidance and a project proposal pitch to a varied group of financiers.
More information about the Investor Readiness Programme can be found here.