An interesting phenomenon and testimony to the growth of the entrepreneurial sector in the Netherlands is an increasing number of Dutch startups that are creating services for other startups. These include fundraising, valuation and social measurement services introduced below.
Symbid – A crowdfunding platform
An alternative way for startups to gain investments from the traditional fundraising options is through crowdfunding: an online investment platform where investors can invest as little as 20EUR for an equity stake into a venture. Symbid offers this platform for Dutch legal entities to seek equity financing from investors both locally and internationally (except US citizens) where investments can be easily made online. This dramatically increases the investor pool to any individual who sees potential in the different business models of the entrepreneurs on the Symbid platform. For the investors, this opens up easily accessible investment options that were previously not as readily available. For entrepreneurs, they are able to gain equity funding which is generally in an expedited and more flexible format compared to traditional means. In addition to financing, crowdfunding offers a new marketing tool to promote their venture operations to a new class of investors and the wider community. Examples of recent ventures that are fundraising through Symbid include: JAC (a compact, foldable electric scooter), ANTECY (a solar fuel pilot plant) and Entologics (transformation of organic waste into insectmeal), each seeking between 60,000EUR to 200,000EUR.
Equidam – Valuation services for startups
Equidam offers an online service for the equity valuation of Small and Medium Enterprises (SMEs) from seed level upwards. Entrepreneurs seeking valuation provide relevant information about their ventures and Equidam produces a standardized report which includes a summary of the key components of the business plan, a rating score and a number of valuations based on different valuation methodologies. Crowdfunding platforms are ideal users of the Equidam service given their service provision as a platform for ventures seeking equity funding. Other users of Equidam services include individual entrepreneurs and other investors such as venture capital funds. Convergence towards standardized valuation techniques as well as standardized formats may be welcome given the scattered sphere of social enterprises and impact investments where there are a number of both entrepreneurs and investors who exist, but without enough of a formal marketplace and infrastructure given the infantry of this space. However, standardized reporting formats do not eliminate the critical due diligence process – entrepreneurs provide their venture information and the reports provide a summary and valuation according to its algorithm. Investors still must evaluate the legitimacy behind the numbers and question the assumptions that the models are built on, which may very well result in a large divergence away from such standardized models.
Social E-valuator – Social Return on Investment Measurement (SROI)
The first two services above are applicable to all startup ventures – Social E-valuator is applicable to startup ventures as well as more mature organizations. They provide a service to measure the somewhat elusive and constantly debated aspect of social enterprises: SROI and social impact. Below is a definition of SROI provided in a whitepaper by Social E-valuator:
The SROI (Social Return on Investment) is a principles-based method that provides a consistent approach to understanding and managing an organization’s impact. In brief, it guides the process by which an entity identifies different stakeholders, asks for their perceptions of important outcomes, develops indicators for those outcomes, adjusts the outcomes for an assessment of what would have happened in absence of the organization’s work, and values the impact to arrive at a better understanding of the impact of an organization. The aim of SROI is to account for the social, environmental, and economic value of an organization’s outcomes.
Social E-valuator is a software tool that measures impact with the following items: scope & theory of change, stakeholders & impact map, verification & dialogue, valuation & monetization, monitoring & evaluation. For social entrepreneurs, the issue of how to measure impact, what impact is being made and how to establish impact goals are common challenges which may be addressed through tools such as this one.
Beyond The Netherlands?
There are additional service based ventures providing services for startups which aren’t covered and the above are examples of the large market of startups that is only growing as the entrepreneurial space develops here. It would be interesting to see if and how these ventures expand beyond the Netherlands in the future to help encourage the further development of the startup space in other countries.