Financing your Business from start-up to grown-up

For a biotech start-up company to succeed, there are some key ingredients you can’t do without. An excellent team, a novel and innovative product or technology and a good understanding of your target market and financing. This section is dedicated to the financing of a new or growing company, split into three topics:

The LSH webportal hosts a Subsidy Database, which offers up to date information about subsidy and grant programs for Dutch biotech companies. It is found under LSH Services behind Log-In.

Early stage & Pre-Seed funding

These are the investments you make either with help from family or friends or by entering business plan competitions or finding a fund specialized in Pre-Seed investment. Your The product is still growing, you have a small team and the focus in this phase is usually on development, rather than marketing and full scale production.

Pre-Seed Funding
Business plan development

Pre-Seed funding

The aim of the Pre-Seed Funds is to stimulate new entrepreneurs and young companies to become successful. These program offer Pre-Seed funding, expertise and infrastructure for entrepreneurs who wish to start a company based on research and technology.

Regional Funds for early stage biotech companies:

Business plan development

The big advantage to entering a business plan competition is not just in the possibility to win a grant to help further your company, but a great win is in the networks you can build by meeting the experts and fellow starting entrepreneurs. The topics in the courses vary, but usually have information about Intellectual Property (IP), finding continuing financing, improving your pitch for investors, marketing, personal development or management styles. A few examples follow:

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New venture

In 1998 the Ministry of Economic Affairs and consulting firm McKinsey & Company started New Venture as a business plan competition to support innovative start-ups. Since 2000 New Venture is affiliated as an independent foundation with the Baak, Management Centrum VNO-NCW.

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The Venture Challenge: Pave your way to success

The Venture Challenge is one of the Netherlands Genomics Initiative’s activities aimed at stimulating and supporting Life Sciences researchers in translating their inventions into viable business ideas.

In two 3-day workshops, the facilitators and other ‘competing’ teams will challenge you to focus your business idea to create optimal customer value, and you will learn to pitch your business case.

Are you up for a challenge? Visit the Venture challenge website and apply.

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NGI Pre-Seed Grant

You’ve put in the research, now reap the rewards. Start your company today with the Life Sciences Pre-Seed Grant. Initially the Pre-Seed Grant was introduced by the NGI in 2008 and only intended for genomics-based initiatives.

Thanks to contribution of LSH Innovation Program, the Grant is open to the entire Life Sciences field. The budget has been expanded from € 9 million to a total of € 10.4 million and is provided by NGI (€ 9 million), LSH (€ 3 million) and ZonMw (€ 0.4 million). ZonMw administers the Life Sciences Pre-Seed Grant programme that will run for five years. The Life Sciences Pre-Seed Grant allows for a large number of projects that will further increase the value of genomics for society.

All Life Sciences researchers thinking about starting up a company are invited to submit an application. Worth up to € 250,000, the Pre-Seed Grant offers superb prospects for those involved in applied research and who are looking to exploit their fundamental research commercially by starting up a new business. Please check the website site for new calls: NGI Pre-Seed Grant website.

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STW Valorisation Grant

The STW Valorisation Grant is aimed to promote the commercialization of knowledge and skills within public scientific research institutes. This grant is no longer eligible for projects that fall under the criteria of the NGI Pre-Seed Grant, please check the website for more details.

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Niaba Masterclass BioBusiness

The Masterclass Biobusiness trains entrepreneurs to see and make use of economic advantages in biotechnology and help sustain the growth of the life sciences sector. Learn more on the Niaba website.

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Government Agencies: Subsidies and Grants

The Dutch government offers a range of subsidies and grant programs to support innovative companies. These programs range from a fiscal facility for companies and organizations that perform research and development (R&D) to practical assistance to help you participate in European research funding programs.

AgentschapNL

Focusing on sustainability, innovation, international business and cooperation, NL Agency is the number one contact point for businesses, knowledge institutions and government bodies. You can contact us for information, advice, financing, networking and regulatory matters. Whether you are entrepreneur, (knowledge) institution or government body.

Below is a list of some of the more important programs from AgentschapNL for Dutch biotech:

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WBSO: Research and Development (R&D) tax credit

This Act provides a fiscal facility for companies, knowledge centres and self-employed persons who perform R&D work. In this context, R&D means technical scientific research, the development of technologically new physical products or physical production processes (or parts thereof) and the development of technologically new software (or parts thereof). Non-companies qualify only if they perform R&D on the instructions and at the expense of a Dutch company. Read more at the AgentschapNL website.

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BMKB Besluit Borgstelling MKB

The BMKB program is a government warranty of 1.5 Million Euro. Because of this government warranty for part of your company loan, the bank is more inclined to loan you the rest of your required sum. For starting and early stage innovative companies, favorable conditions apply.

The BMKB borgstellingsregeling is meant for companies with a maximum of 250 employees and a yearly turnover up to 50 millin Euro. Most SME’s can benefit from this arrangement. BMKB can only be applied for through your bank.
More information in at the AgentschapNL website (in Dutch).

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Innovatiekrediet

Companies in the life sciences can apply for the ‘Innovatiekrediet’, which is designed for high-risk, high-tech SMEs and innovations that need extra funds to cross the 'investment gap'. The ‘Innovatiekrediet’ covers up to 35% of project costs; the maximum amount available per project is EUR 5 M. Projects can last up to four years and must have clearly defined milestones. Projects must raise their own contribution of 65% in the market. Learn more at the website of AgentschapNL (in Dutch).

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Internationaal innoveren

The’ Internationaal Innoveren’ (international innovation) program is open for projects in which you develop and collaborate with a minimum of one foreign partner. The technological innovation must lead to a product, process or service. Read more at the AgentschapNL website (in Dutch).

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Private Investment

Venture Capital
Business Angel investors

The step from start-up to Biotech Company takes a long time to make and is split up into smaller steps, that each requires funding. These steps can be part of the product pipeline from idea to marketable product. For each of these steps a business plan, or a part of that needs to be written up. The Venture Capital funds usually invest in a later stage of development than the Pre-Seed funds, Angel investors or local/regional funds. Seed Capital can be the next step after the initial Pre-Seed phase, offering a larger sum to expand the research, the team and the marketing or to protect the IP further for example.

Venture Capital

It helps to know who your future financial partners can be, to meet and network with venture capital investors and let them know about your idea and how you go about building your company. Do not expect a quick result, a relationship needs to be built, but there is a better chance of finding that next step funding with partners you have started to engage and trust early on in your development process.

A list of Venture Capital firms and funds in the Netherlands, or foreign investors who also invest in Dutch initiatives can be found below.

Business Angel Investors

Angel investors and venture capital are particularly important sources of funding in the Life Sciences. In the Life Sciences sector the risks of developing a new product are so high and the timelines so long that most banks are unwilling or unable to provide funding. For this reason, dedicated venture capital firms have formed which include experts capable to assess these risks.

Angel investors or business angels are generally well-off entrepreneurs who have stepped out of their company but still have a keen interest in the next generation of entrepreneurs and who are willing to fund a start-up in exchange for convertible debt or a percentage of your business. Some have organized themselves into a so called 'Angel Group' of 'Angel Network'.
Unlike Venture Capitalists, who manage and invest money of others, angel investors invest their own money. A Business Angel will usually not invest in several projects, but find an entrepreneur to support and if needed also play an advisory role.

Through life sciences cafes, network drinks, regional and national life sciences events, entrepreneurs and financers can meet each other. It’s important to build up a good relationship, before asking for help or funding. In the Dutch landscape there are also some Business Angels networks.

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