Marc van Voorst tot Voorst: Call to the formation table

January 23, 2024

By Marc van Voorst tot Voorst, Deputy Director of the Dutch Association of Participation Companies (NVP)

We must take better care of our investment climate, the Dutch startup and scale-up ecosystem and a level playing field within the EU. Statements about investors should be based more on facts, figures and research. That is the call from the NVP to informant Ronald Plasterk, who is in discussions with the PVV, VVD, NSC and BBB about forming a new cabinet.

Why? Since 2007, private equity and venture capital have invested approximately €77 billion in equity in the Netherlands. Currently, approximately 2,100 companies in the Netherlands have a private equity or venture capital fund as a shareholder, employing 590,000 people (10% of private employment). This makes private equity investors an indispensable source of capital for SMEs and venture capital investors are important financiers of startups and scale-ups.

Participation companies are catalysts of innovation, change and progress and therefore fulfill an essential role in current social transitions (energy transition, protein transition, change in healthcare, etc.). The companies in the portfolio of private equity firms are growing above average, both in terms of turnover and jobs. Finally, private equity companies provide a structurally good return to investors such as pension funds. They are part of the solution. Or as professor Arnoud Boot said: 'The Netherlands is better off with private equity and venture capital.'

Investment climate

A good and competitive investment climate is crucial. Money must be earned before it can be spent. A good investment climate encourages investors to pump capital into the economy. This leads to growth, job creation, healthy competition and technological progress. A flourishing economy generates tax revenues for the treasury and leads to an increase in the overall prosperity of the Netherlands. Everyone benefits. That is why 'gold plating' of European legislation and regulations must be prevented, the Netherlands must be competitive within the EU, and peace and predictability must be created in the tax infrastructure of the Netherlands. Finally, the 30% ruling for expats must be retained.

Start-up and scale-up ecosystem

The startup and scale-up ecosystem must be strengthened and expanded. Startups and scale-ups contribute to innovation and entrepreneurship and create the technologies of tomorrow. For this, these companies need equity from venture capital funds. Capital that is sometimes insufficiently available in the Netherlands.

The Netherlands is in the unique position of having large pension assets. Pension funds invest all over the world, but relatively little in Dutch venture capital funds. That is why pension funds must be enticed to invest more in Dutch venture capital funds. Efforts must be made to strengthen the existing fund infrastructure. In this way, Dutch startups and scale-ups become less dependent on foreign money and are more likely to stay in the Netherlands. In this way, Dutch values ​​and ideas, for example when it comes to culture, human rights, data privacy and autonomy, can be and remain part of shaping our startups and scale-ups.

Level playing field EU

A level playing field within the EU is important. This means that companies and countries within the EU are given a fair opportunity to compete. It contributes to a healthy and equal economy for everyone. It minimizes unfair advantages and promotes fair trade, economic growth and stability within the European market. This attracts investors and companies. The EU is thus better equipped to compete with Asia and the United States.

A level playing field can be created by improving the capital markets union and making sustainability legislation manageable and globally competitive. A good European response must also be set up with regard to the Inflation Reduction Act (IRA) in the US. The IRA could cause exports to the US to come to a halt or startups to move to the US. Finally, the patchwork of foreign direct investment regimes in the EU is counterproductive.

Facts, figures and research

Finally, base statements about the business community and investors on facts, figures and research. The tone of the debate is too often based on gut feeling. That damages the investment climate. Bring nuance to the debate.

By including the above four points in the formation process, the Netherlands remains an attractive country for companies and investors. This is good for startups, scale-ups, SMEs and therefore for BV Netherlands.