The authors are Lex Hoefsloot, co-founder of Lightyear and advisor at Techleap, and Annemieke Wisse, Capital and Scaling Lead Deeptech at Techleap. For the report, they analysed the funding data of nearly 28,200 companies and spoke at length with founders and investors who know the ecosystem from the inside.
Where does it go wrong?
The problem doesn’t start during major growth phases, but right from the very first round of funding. European deep-tech companies receive three to four times less capital per investment round than comparable US companies. In large rounds of over €100 million, that difference is even greater. The result: US deep-tech companies generate over sixteen times more value at exit than their European counterparts.
A particular challenge for the Netherlands is the heavy reliance on public funding in the early stages; more than two-thirds of the start-up capital for deep-tech companies comes from the government. This can inadvertently push entrepreneurs into a ‘subsidy mindset’, where commercial ambitions take a back seat.
Five concrete steps forward
The report is explicitly not an end point, but a blueprint. Techleap sets out five recommendations aimed at founders, investors and the government. For instance, the authors advocate structurally linking public early-stage funding to private co-investment, and for a scheme that encourages successful tech entrepreneurs to step in as business angels for the next generation of deep-tech companies. The research shows that the presence of an experienced entrepreneur in the early-stage capital structure significantly increases the chances of securing growth funding at a later stage. Furthermore, the report advocates for intensive international support from day one and a more targeted use of government funds at times when private investors have not yet come on board.
