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Dutch Angels: important source for funding of innovative startups

Angel investors are typically entrepreneurs that have successfully sold their company and now have the time and money available to invest in the growth of other ventures. It has been estimated that a large number of business angels are active in the Netherlands. A study initiated by the European Commission (Evaluation of EU Member States’ Business Angel Markets and Policies 2012) concludes that in the Netherlands about 30,000 to 55,000 people – not being part of the Family & Friends network – provide external funding to young firms in the three previous years.

Business angels appear to be largely invisible. Contrary to the USA, a large number of Dutch angel investors want to be anonymous. This may be explained by the Dutch culture in which it is not common to show your wealth. To a certain extent this is also the case in other European countries. Studies of European Business Angel Networks (e.g. EBAN Statistical Compendium 2017) indicate that throughout Europe approximately 1 out of 10 angels is visible through the membership of an angel network. Therefore the total angel market is estimated about 10 times larger than the visible market.

Why is it important that angel investors are visible and their investments are measured and published? The most important argument for increasing visibility of angels is that it improves the access to capital for startups. Once angels are known and it is clear what their investment focus is, they can be approached by relevant ventures seeking funding. Second, when it is shown what the sizes of angel investments are, policy makers can also take it into consideration.


Analyzing Dutch startup transactions

For the above reasons, matchingWINGS has spent time and effort to analyse angel investment transactions in the Dutch market. matchingWINGS has built upon a database of Dutch startup equity and convertible loan transactions in 2018 of Golden Egg Check. Also some missing angel and crowdfunding transactions (all equity deals or convertible loans) has been added. Only transactions of which information is available in the public domain and can be verified by external sources have been added. Confidential or informal information about deals from the matchingWINGS network is not included. For the analysis a categorization has been made of the investment amounts and the type of investors.


Published angel investments 2018

Last year 52 startups received funding from one or more (syndicate) angel investors. These 52 investments represent a total amount of € 44.7 million.

Angels were also providing co-funding in deals led by Venture Capital, Regional Development Agencies or Corporates: in 20 deals co-funding by angels was provided. The total amount of these deals was € 64.4 million; the share of angels in these are unknown. In conversations with Venture Capital Funds information was gathered that the share of angel co-funding can be up to 50% of the total invested amount.  However, it is unclear how representative this percentage is.

In the Netherlands the large banks provide business angel services. ING, ABN AMRO and Rabobank are organizing pitch events where startups seeking funding are matched with their customers. Resulting angel investments are not published. It is estimated that the banks in total facilitate about 50 deals per year, representing an investment volume of about €15 million.

Angel investors also play a role in equity-based or convertible loan crowdfunding projects. Last year 19 successful crowdfunding campaigns – equity-based and convertible loans – were published, raising a total of € 6.2 million. The share of angel investors in these deals is unknown.


The importance of angel deals

Last year 281 funding rounds of startups have been registered. Angels were involved in 72 investments representing 25.6% of all funding rounds. An analysis has been made if the relevance of angel investors differs per type of funding round. For this, categories of the deals are based on their investment amounts:

  1.  Less than €100k (seed capital)
  2. €100k up to €1M (post seed / pre series A)
  3. €1M – €5M (series A and B)
  4. €5M+


Next the share of angel transactions per category was calculated. The following graphs show that the funding provided by a single angel or angel syndicate (angel led deals) is most prominent in the funding rounds of €100k up to €1M: in 30% of these deals angels are involved. It can expected that in reality the share of angels is bigger as current percentages are based on published deals and many angel deals happen out of the public domain. It is assumed that all deals of VCs, Regional Development Agencies and other market parties are published since publication adds to their image of an active investment company.


In addition it is expected that a large number of smaller angel investments (below 100k) are missing in the list. By definition the number of deals traced for this category is very low. This may be explained by the use of alternative financing such as subsidies or grants in addition to bootstrapping. It can also be expected that the Family & Friends network play an important role in this funding round.


Individual angel investments vs syndicates

A syndicate seems more popular (49% of angel deals) than an investment of an individual angel (14% of deals). For the remaining 37% of the deals, the number of angels is not disclosed. All published investments by a single angel are below €200k.