May 19, 2021
With the biggest motivation to do more than just 'deals' - as before in my M&A career - I started working at StartGreen Capital seven years ago. The goal: to meet the challenges on the path to successful upscaling of their company and maximum impact, together with start-up founders. After a rollercoaster of no fewer than seven parallel follow-on investments, of which the dust is still swirling, I finally have time for reflection. Normally I could now use seven closing dinners for that, with the same number of forward and backward speeches, but during the lockdown it has to be different. Even with a bottle of champagne, those “Zoom closing calls” don't come close to the real thing.
That gave me time for reflection: Looking back the entire StartGreen time until now and reflecting on the lessons learned in this fantastic time. My very first blog series seems like the perfect opportunity for this: In blog #1 I take stock of the switch from M&A to impact investing. Blog #2 explains my results of 7 years of impact investing, and blog #3 focuses on the lessons learned in scaling up start-ups.
1: From mergers & acquisitions to impact investing
This first blog in the series is aimed at all investment bankers, consultants and others considering the step into the world of impact investing. Are you already one corporate refugee or started immediately as an impact investor or entrepreneur, well done! Feel free to skip this part and wait for Blog #2: The results of 7 years of impact investing or Blog #3: From start-up to scale-up: lessons for entrepreneurs and investors. But are you still active in the dark side and do you want to learn whether it is worth taking off those golden handcuffs? Then this is the right starting point for you.
Work hard, play hard
Joking aside, I had a fantastic time at ING Corporate Finance, where I started in 2007 in the midst of the private equity bubble and soon after saw the credit crisis erupt from the inside out. With a super team of 40 men - yes, all men - in a period of 4 years I was able to screen many offshore energy and TMT companies into the kitchen, learned the intricacies of appreciation and structuring, enjoyed the excitement of 'deal making 'at small ( EUR200m) mergers and acquisitions, witnessed the rise of INGCF in the Dutch M&A market and, above all, had a lot of fun with colleagues. Almost every Friday night there were at least a handful in the bad pubs of the Lange Leidsedwarsstraat. The well-known 'work hard, play hard, learn hard'. Also the creed of StartGreen Capital, by the way, but with the engine just switched a few teeth higher.
Build and be involved
So why the switch after just over 4 years of M&A? Apart from the desire for a slightly healthier work-life balance, to make room for a starting family, it was mainly the urge not to switch to the next deal after an investment, but to really build on the next deal. upscaling of the companies. Not only as a sounding board adviser on the financial strategy, but as an enterprising and committed shareholder creating lasting value and realizing impact. And especially want to get started with young companies, where the urge for innovation is really central. Disrupting the old and not very sustainable economy with driven entrepreneurs by developing smart technologies and revenue models. Where risks are taken, big dreams are made and where people are allowed to stumble, as long as people learn from them.
Incidentally, I was able to experience a short 'fail forward' startup experience myself after INGCF before I started combining investing and entrepreneurship at StartGreen. For two years I experimented like 'The Lean Startup' with a so-called social travel startup, in order to achieve a considerable number of milestones and to reach a nice audience. But in a competitive and rapidly changing market, I decided not to invest any further after two pivots. Not that 'dream exit', but one of the most valuable experiences from which I can still draw daily in the venture capital profession. Thus: 'failed forward, into my dream job.'
The switch: passion, challenge and fun with driven people
You will read the answer to the question of this blog: Yes, it is 100% worth making the switch from M&A to impact investing. Sure, the switch means taking off the golden handcuffs and two steps back up the salary ladder (the more the 'earlier stage' you go), but you immediately get a lot in return. I found all of the above what I was looking for at StartGreen, and more: so much passion in studying innovations and new technologies that the line between work and hobby is now impossible to draw. Challenge in selecting start-ups and overcoming obstacles on the way to growth. Varying work in which no day is the same. And especially the same fun with passionate and diverse people 'who give a damn'. Ok, I have never seen the Lange Leidse again in the last 7 years, but that is mainly due to that 'other phase': I spend my Friday evenings with diapers, etc., and therefore no longer belong to the 'TGIF whatsapp group' of the StartGreen analysts and associates, or whatever that chat may be called. Fair's fair.
There are also trade-offs
Are there no trade-offs? Hell yes. Even more than in M&A, you have to be able to take a beating, in two ways: First, there is a greater chance that your investment in a young start-up (with unproven product-market-fit) could go bankrupt or at least a few times past the edge. will go from the abyss. Stress resistance is therefore a requirement. Second, you have to be able to handle seeing an average of 100 companies before investing in one. Or because the bar is set high with both financial and social return requirements, and so many entrepreneurs have to be disappointed. In other words, because the best startups enjoy a lot of interest from investors. 'No selling' and disappointment are therefore also part of the profession. Finally, especially for the 'VPs and up', there is the aforementioned step back in terms of salaries and bonuses, and the 'carried' is a reward that can only be used with great success after a long breath to exit an entire portfolio. So you invest impact mainly because of your passion.
The sustainable finance sector needs you
Before I finish this first blog: You can, by the way, perfectly build on your M&A or consultancy skills set: financial modeling, valuation theories, powerpoint and excel skills, negotiation experience, business acumen to effectively analyze markets and companies, it all remains relevant and valuable. . So are you that analytically strong investment banker or consultant, who wants to continue with finance, but still wants to follow the entrepreneurial and green heart? The sustainable finance sector needs you, so the invitation for a cup of coffee is here.
Next up: Investing the results of 7 years of impact
In a next blog I will share the results of my ten VC investments in 7 years. Read this blog here. Would you like to know more about Impact Investing via StartGreen? Feel free to connect on LinkedIn.