Minister of Finance Johan Van Overtveldt (N-VA) aims for Belgium to have more growth capital funds to improve funding opportunities for scale-ups.
In the last years, Belgium did a catch-up manoeuvre encouraging and facilitating entrepreneurs and starters. The financial support for those entrepreneurs is still limited but nevertheless, two large growth funds were recently established: Smile Invest of Urbain Vandeurzen and Fortino Capital II of Duco Sickinghe. However, both growth funds are not directed towards technology companies because they are investing too broadly.
“I am happy with the initiatives, but there is a stronger need for more. In Denmark, institutional investors have an important role in the growth funds. They also have more experience and larger teams, whereas in Belgium the knowledge is more limited, so investment risks are higher.” says Minister of Finance Johan Van Overtveldt. He would like to create a framework to increase the size of the funds in Belgium.
‘No risk for the government’
A working group of the cabinet, in which the Federale Participatie- en Investeringsmaatschappij (FPIM) also participates, is now working on a plan to stimulate growth funds. “We do not aim to increase risk for the government” says Van Overtveldt.
Jurgen Ingels, who is supporting the initiative, explains that his own fund Smartfin Capital has the ambition to increase the fund size from 75 million to 150 million euros. "The scale-up funding rounds are increasing: 5 years ago, a typical scale-up funding round was around 5 million. Nowadays, this is going towards 10 to 15 million. To spread risk, larger funds are needed.” says Ingels.
Network of companies
“In order to become a successful scale-up, companies do not only require funding. They also have to work efficiently by squeezing time. Reality is that scale-ups all have the same 200 questions such as how to negotiate licensing contracts, how to implement an ERP system, or how to incorporate stock option plans in your remuneration policy. Therefore, we would like to exchange best practices by connecting European scale-ups”,says Jurgen Ingels.
Previously, Ingels launched start-ups.be and he’s now starting Scale-Ups.eu. In September 2018, along with this team, he is setting up an international congress on scale-ups, bringing together the 55 most promising European scale-ups to exchange knowledge. “You could always look up how to do it, but more important to know is who can do it”. Jurgen is convinced that collaboration between companies is becoming the company model: “Vertical integration is passed. We are now moving to horizontal platforms, where everybody is contributing to knowledge and realizing a part of the solution. The setup of an ecosystem is facilitating such clusters”. With B-Hive, he already created such an ecosystem for fintechs.
Around 30 scale-up CEOs are willing to play an active role in the knowledge exchange. One of the initiatives of Scale-Ups.eu is a six-month practice-based masterclass for young managers. Multiple universities and business schools would cooperate in this masterclass. Minister of Finance Van Overtveldt confirms that the government could facilitate this with the FPIM, similar to what they facilitated with B-Hive.
Published by The Standaard on Nov.30th 2017