Yesterday morning we gathered early for the breakfast session on #How2Finance.
A large group of startups and entrepreneurs listened to various experts from Oost NL, Orion, Rabobank, Oneplanetcrowd, Netherlands Enterprise Agency (RVO) and Briskr who elaborated on a solid life cycle funding; Which options on financing can be used in different phases of the development of a company?
We then offered various rounds of speed dating with the experts so entrepreneurs could discuss their individual case. In the meantime we enjoyed the networking, drinks and bites.
We look back on a dynamic event with enthusiastic entrepreneurs that we can hopefully help grow their businesses in the near future.
Business Angels Network Nijmegen is the network of informal investors that strengthens the ecosystem of Nijmegen start-ups and scale-ups.
The network brings these business angels and the start-ups and scale-ups together on a regular basis. On 8 March the following four start-ups were allowed to pitch: HomEvap, XHEAL Dx, LumiNose and SPL Medical.
Medical innovations are constantly being developed in order to provide better care. The discipline Health Technology Assessment (HTA) offers methodology for assessing the (added) value of medical innovations. The (further) development of HTA methodology contributes to making adequately considered decisions.
Subsidy for (further) development of HTA methodology
The purpose of this grant is to develop or improve the methodology for conducting an HTA in the field of medical technology; so that stakeholders can better assess the (added) value and make better decisions about appropriate use, efficient procurement of care and/or package management.
Since 18 February 2022 the subsidy call HTA methodology, round 1 is open. The deadline for submitting an application is 19 April 2022, 14.00 hours.
Students of the Digitale Werkplaats Arnhem Nijmegen, DWAN, help SMEs with advice on online marketing, website optimisation, online findability and more, so that the organisation can take steps to boost productivity and profit and work on future-proofing. Entrepreneurs can download the SME voucher via the DWAN website and make free use of the online session with students from the MBO, HBO and WO.
Members of the Lindus business association attended the CS in 2021 and see the added value according to the online member magazine (p. 27).
Investment and result online session
With the voucher, the entrepreneur only invests contact moments and receives:
- a non-binding intake;
- 3-hour online session with max. 5 students under the supervision of professionals;
- the advisory report with all ideas and practical advice;
- the consultation on the possible implementation of advice by students.
Online session appreciated by entrepreneurs
Since 2020, several entrepreneurs have made use of the online session, including the owner of TIG Academy, which makes online instruction videos about TIG welding for starters and advanced students: “The assignments were good, they make you think in a different way and enlarge your perspective. The interaction with each other generates new ideas, which is not only inspiring, but also gives more direction.”
After the online session, students helped TIG Academy develop the basic communication plan and the Brandbook.
How does the entrepreneur get the voucher?
The SME voucher is for entrepreneurs between 2 and 50 FTE. More information about the voucher and how to download it can be found here. Follow the steps on the voucher and guarantee a place with students. There is a limited number of places available.
Contact
You can mail us: DWAN@han.nl.
Our project officer, Marie-Thérèse, will be happy to help. You can find our website here.
Oost NL is one of the initiators of digital workshops.
After 3 years, the international Health Valley Event on 15, 16 and 17 March in Nijmegen can finally be visited live again at Pathé and Van der Valk. Every year, the healthcare innovation network of the East Netherlands organises the largest healthcare innovation conference in the Netherlands, connecting the more than 1,200 participants from home and abroad. In 2019, Health Valley Netherlands last organised an edition on location where visitors could meet each other. In March 2020, the event was cancelled last-minute and in 2021 participants could only attend online.
Chris Doomernik, Director of Health Valley: “We are extremely happy to finally be able to organise the event on location again. Now our visitors can connect face-to-face with entrepreneurs and people active in healthcare organisations, knowledge institutions and governments. An important step towards accelerating innovation through the use of technology and thus making tomorrow’s health and care possible, today.”
Plenty of tickets
Given the current flexibilities (the event is a so-called flow location), there are no restrictions on the number of visitors. There are also no restrictions such as testing for entry. Of course, the health of the visitors is paramount and Health Valley advises to follow the advice: wear a mouth mask if required, wash your hands regularly, test before visiting the event and stay at home in case of complaints. Interested parties who cannot or do not wish to attend a live on-site event can use an online ticket.
The Health Valley Event
The Health Valley Event is the largest healthcare innovation conference in the Netherlands. Every year, visitors from the Netherlands and abroad from the health care sector, the business world, research, education and government come together to work on tomorrow’s health and care. At the event, the exchange of knowledge, but also the gaining of inspiration and especially matchmaking are central themes. For this edition, there is a special cooperation with the European (Active & Assisted Living) AAL programme and there will also be extra attention for healthy ageing. More information: www.healthvalleyevent.com.
Read more in Dutch:
De 18 gemeenten van de Groene Metropoolregio Arnhem-Nijmegen, provincie Gelderland en The Economic Board willen de kracht van de regio beter benutten. De partijen hebben een Bestuursakkoord en een Investeringsagenda opgesteld, waarmee zij zich langdurig inzetten om de regio te versterken. De komende tien jaar moet deze regio doorgroeien tot een internationale topregio in Health, Hightech en Energy, in balans met de groene kwaliteiten.
Gedeputeerde Peter Kerris: ‘De regio Arnhem Nijmegen is het groene hart van de Gelderse economie. Met het bestuursakkoord slaan overheden, onderwijs en ondernemers de handen ineen om de kracht van de regio nog beter te benutten’.
Europese Topregio
De regio wil doorgroeien tot een topregio die economisch tot de best presterende regio’s van Nederland hoort en internationaal bekend staat als dé circulaire regio van Nederland en Europa.
Ahmed Marcouch, voorzitter The Economic Board: ‘We ontwikkelen in onze regio baanbrekende toepassingen op gebied van schone energie, betere zorg, duurzaamheid en sociale Artificial Intelligence. Daarmee kunnen we bijdragen aan de grote maatschappelijke opgaven en tegelijkertijd aan de productiviteit en werkgelegenheid waardoor onze regio een nog aantrekkelijkere plek wordt om te werken en wonen.’
Concreet activiteitenplan
De afspraken om de regio te versterken zijn vastgelegd in het Bestuursakkoord
en de Investeringsagenda Regio Arnhem-Nijmegen 2022. Het is de basis voor langdurig commitment (tien jaar) aan de gezamenlijke ambities. Dit bestuursakkoord vervangt het akkoord dat de gemeente Arnhem, de gemeente Nijmegen en de provincie Gelderland in 2017 hebben ondertekend.
Hubert Bruls, voorzitter van de Groene Metropoolregio Arnhem-Nijmegen: ‘We verheugen ons op de vernieuwde samenwerking. Ik hoop en verwacht dat ook het nieuwe kabinet inzet op onze regio, zodat wij dit allemaal voor elkaar kunnen krijgen. We hebben een visie en een concreet activiteitenplan, maar we hebben het Rijk daar wel bij nodig. Dan kunnen we verder innoveren, gekwalificeerd personeel opleiden, omscholen en aantrekken en de komende jaren 60.000 woningen bouwen met behoud van onze groene omgeving.’
Investeringsagenda
In de investeringsagenda maken de Groene Metropoolregio, de provincie en The Economic Board afspraken over hoe zij, zowel financieel als niet-financieel, bijdragen aan de gezamenlijke ambitie voor de regio. Naast financiering voor concrete projecten zetten de deelnemende gemeenten 4 miljoen euro in voor de uitvoering van initiatieven en programma’s. Provincie Gelderland heeft de intentie om deze financiële bijdrage van de gemeenten te verdubbelen. De provincie weegt per initiatief af hoe het project bijdraagt aan de provinciale doelen en bepaalt haar bijdrage aan de hand daarvan. Naast geld zetten de partijen ook tijd en capaciteit in. Met de financiële bijdrage die is opgenomen in de investeringsagenda hoopt men andere partijen te verleiden om ook in deze regio te investeren.
Ondertekening
Het Bestuursakkoord is 3 februari ondertekend bij Connectr in Arnhem door Peter Kerris (Provincie Gelderland), Ahmed Marcouch (The Economic Board) en Hubert Bruls (Groene Metropoolregio).
Blog Aeternus
As an entrepreneur you are – as a matter of course – occupied with the future of your company. What are the opportunities in the market for your branch? Where do you want to grow with your company? And when you eventually want to sell your company, how much is your company worth? Smart entrepreneurs have been developing their most important value drivers for years before selling their company. The value drivers are in fact the most decisive factors for the value and price of your company, not just profit or EBITDA.
In this blog you will read which factors determine the price of your company, how this value is determined and how you can anticipate this in time for the best deal price as an end result.
Determining the value of your company: cash flows, business model and risks
First of all, let’s say that determining the asking price of your company is not an exact science. Nor is it an accounting sum of numbers on the balance sheet and in the profit and loss account. So what is it based on?
The basis for the value of a company is its cash generating capacity. And not profits. A company that, in addition to depreciation, also has to invest the profit each year in new machinery and stock has no value in the perspective of constant exploitation.
To calculate the value, we use the so-called Discounted Cash Flow (DCF) Method, by which future cash flows, taking into account the risk profile of the company, lead to the value outcome. In the assessment of future cash flows and risk profile, the quality of the business model plays an important role. The following aspects spring to mind:
- Is your business model based on hours or products?
- Does your company have long-term contracts?
- What is the Customer Lifetime Value of your customers?
- What are the market developments in your sector?
- To what extent is your business scalable with a view to the future?
- What are specific risks and dependencies?
- What development opportunities has the company developed for the future?
These are partly subjective assessments that may be judged differently by a buyer. This difference in assessment can cause a discrepancy between your personal perception of a price and the perception of the potential buyers. Our experience shows that more than half of the entrepreneurs overestimate the value of their business. With the help of an acquisition specialist, you can formulate a realistic and market-based price range in proper consultation.
That many times EBITDA?
In offers and negotiations the price is often expressed in ‘so many times the EBITDA’, also called a multiple in the takeover world. The Multiple is therefore the denominator by which EBITDA is multiplied to arrive at the rough company valuation. For a Multiple of 6 with an EBITDA of €1.5 million the enterprise value is thus around €9 million. Multiples are derived from databases of comparable transactions, but in practice not enough is known about the transactions to make a proper comparison: were the circumstances similar? Was the buyer comparable? Is the company really comparable to the company in this transaction? Multiples are company and transaction specific and companies are difficult to compare. The EBITDA method takes too little account of company-specific factors. For example, a relatively small software company in a fast-growing market can easily be worth 10 to 15 times the EBITDA. And for a larger company with fewer growth opportunities, a lower Multiple of 4 to 5 might just apply.
In addition, the EBITDA is not useful in many industries, for example companies with high investment needs, where EBITDA is reduced by investments.
EBITDA is therefore too imprecise for a good value indication, but in some cases it can be used as a rule of thumb.
Dealbreakers and price reducers with negative effect on the sales price
Dealbreakers are issues that can frustrate negotiations. Examples are the right of a major customer to terminate the contract in the event of a change of ownership, a patent infringement or the absence of a non-competition clause in the case of some key employees. Our experience shows that this does happen often.
Price reducers are elements that weigh heavily on the side of potential buyers when considering the price. They include, for example, the high degree of dependence on a few important customers. Or the inability of the buyer to deliver critical business data due to poorly designed systems. But of course, the unexpected deterioration of business results during the sales process can also be a deal-breaker.
Influencing the value of your company yourself?
As an entrepreneur, you would do well to start thinking in good time about value drivers, dealbreakers and price reducers. A complete insight into these factors is the first step towards preparing your company for sale.
Discover how you can influence the valuation of your company here the E-book (in Dutch).
From PhD-student to experienced entrepreneurs, the group of participants in the workshop ‘How to attract capital Investment for your innovation in Health/HighTech’ on February 3 was very diverse. Speaker Thijs Cohen Tervaert, investor and director at INKEF Capital informed us he was trained a medical doctor, but never practiced as one. He now helps organisations in healthcare and pharma to co-fund.
He explained the role of venture capital, the criteria used in selecting the right investments and how even early on in your startup you can prepare for these.
In healthcare you need a longer investment horizon to actually start up a company and make it successful. To make the product market-ready you need the help from hospitals, do clinical studies and find partners in innovation.
Nowadays, Digital Health is high on the agenda. Healthcare and technology have a lot of potential as a combined sector with many beautiful and innovative applications that can improve cure and care.
On the basis of several practical cases, it became clear how INKEF can help to finance and develop the company. We learned that venture capital can take place in different stages of a company, or even in certain focus areas.
At the end of the workshop there was an interesting discussion among the participants how to attract venture capital for their organisation or idea.
We look back on yet another successful workshop from INKEF and Briskr.
Patent protection is already crucial in this early phase, so we help the young entrepreneurs with that. I’ve been guiding them with patent applications, Freedom To Operate studies and more in recent years. And so we will continue to do that in the coming years. Many entrepreneurs, both starting out and experienced, only realize too late how important it is to sit down with a patent attorney at an early stage. And there are several good reasons for doing so.
REASON 1: WE CAN IDENTIFY THE PATENT RIGHTS OF THIRD PARTIES AT AN EARLY STAGE
Many entrepreneurs are so busy developing their product, starting a business and finding investors that their competitors’ patent rights are a blind spot. You may know who your competitors are, but do you know if they have relevant patent rights? This is a question that investors frequently ask. So you need to investigate that. Whether you do this yourself, or have it done; it must be done. Otherwise you run the risk of developing a product that infringes on someone else’s intellectual property. Which brings me to the next point.
REASON 2: WE CAN STILL EASILY ADJUST THE DESIGN
The earlier you know about third-party patent rights, the easier it often is to make minor adjustments to a design. These adjustments may make it possible to design around the existing patents and still be able to enter the market without infringing them. This can of course also be done at a later stage, but is then often much more expensive. The conversion of an entire production line costs more than adapting a concept.
REASON 3: WE CAN DISCUSS R&D RESULTS AT AN EARLY STAGE
Innovative entrepreneurs often overlook two things in the development process. First, they often do not realize that they are making simple but valuable inventions. In addition, they sometimes disclose new products before they are patented. In that case, that invention no longer meets the novelty requirement and they can no longer patent it. By discussing the R&D results with a patent attorney at an early stage, you can avoid these pitfalls.
By looking at this together, we will discover the inventions that seem obvious to you, and you will not disclose anything that should not already be disclosed. At the bottom line, this makes your patent portfolio a lot stronger. This increases the value of your company and your position in the market.
REASON 4: WE INCREASE THE CHANCE OF INVESTMENT
At Startlife, where finding investors is an important goal, we often hear that entrepreneurs come across better to investors after we have talked about intellectual property. Because of their improved understanding of the opportunities and threats related to their intellectual property, they exude professionalism and a grasp of the situation. Someone is more likely to invest in an organization that knows what it has already done, or wants to do, in the area of patents.
SMALL INVESTMENT
The earlier you start talking to a patent attorney, the more grip you have on the initial steps of your venture. Many people only take this step once their techniques have been further developed. This seems logical, but can end up costing much more time and certainly money. Even a brief conversation with a patent attorney can provide you with so much relevant information for your company that it is well worth the small investment.
Britta Driessen went from an intern at Novio Tech Campus (NTC) to the position of business coach at the Radboud University (RU) in Nijmegen. As a business coach and programme manager at RU’s entrepreneurship programme Mercator Launch, Britta focuses on innovation and entrepreneurship. For example, she helps innovative start-ups to turn ideas into viable products, expand their network, finance their business, and acquire all skills needed to create a successful business. She does so in collaboration with regional partners of Briskr.
During her masters in Medical Biology, Britta discovered her passion for innovation. “I was doing research in a lab at UMC Utrecht. I ended up in an interdisciplinary department, with biologists, chemists and mathematicians working together daily to develop new applications to improve quality of life. That is when I discovered what innovation really looks like at a knowledge institution, and what it truly means: creating practical solutions to societal challenges, such as a 3D printing tissue to repair cartilage defects. This piqued my interest.”
In 2016, Britta, who specialised in Management & Innovation, performed an internship at NTC. She talked to many companies about their intended success and the contribution of a campus like NTC to this success. “These organisations contribute to entrepreneurs’ chances of success because they help with practical matters such as facilitating space and connecting you with like-minded people. Ultimately, I ended up doing just that at Radboud University: helping entrepreneurs find their way and create impact. By supporting and stimulating entrepreneurship, we aim to create societal impact with the knowledge generated at our university.”
Building a business concept
There is an incredible amount of talent to be found at the Radboud campus, says Britta: “Many researchers, students and alumni have great, innovative ideas that they would like to act on. We support them in building on their business concept, both substantively and practically. We train and coach entrepreneurs and organise workshops and masterclasses to improve their entrepreneurial skills. Furthermore, we offer workspaces, grant access to a large network and help start-ups towards funding.”
“Simply put, we provide all the tools and methods to benefit entrepreneurs for a lifetime. Even if they eventually choose not to pursue this path, entrepreneurial competencies such as flexibility, market knowledge and presentation skills are always of added value. In that sense, we offer a skills training programme to create impact.”
Cooperation within the region: Briskr and the Radboud University
Supporting entrepreneurs in the early phases of their innovative business is not a solo project. “Of course, we don’t have all the expertise in-house. That is why we collaborate with other organisations in the area and make use of all the knowledge they have to offer”, Britta explains. “Within Briskr, we share and discuss the Health and High Tech start-ups we support. Partners can improve and accelerate the support, by sharing the start-ups and challenges they face, and by providing their knowledge, expertise and network”.
As an example, Britta paints a picture of an entrepreneur who had largely established his business concept. “To be honest, we couldn’t provide him with the support that he needed. So, we reached out to Briskr, and the participant found his place in another programme of one of Briskr partner meetings, more specifically, the Market Readiness Program of OostNL. Now, he receives the most optimal support for his start-up phase.” But that is not the only way Briskr and the Radboud University complement each other. “For example, we offer masterclasses together on topics that are important and relevant to our start-ups. We are stronger when we join forces. And this way, we get to learn from each other, too.”
Helping starting entrepreneurs get the best out of themselves and their idea is what makes Britta happy. “If we support entrepreneurial spirits to reach their full potential, great things will happen.”