Purpose-centricity starts at the top

Money and people are cold lovers. Investment and purpose, therefore, are not each others natural allies. When short-term results take the lead, it is much more difficult to motivate people to create value for customers. But, value for customers, is what brings in long-term results. That’s why, investors who understand that making money is not the main priority, have the best chance to make money on the long term.

Building purpose-centric companies

Building purpose-centric companies is what Participium tries to achieve. We are building several companies from idea to growth. Each of these companies should help people to be more happy at work. That is our purpose. And, it is the mother-purpose for all the companies we are building.

That’s why FunkyTime helps knowledge workers, project managers and operations managers to have  a more ‘funky’ time. That’s why Forte changes technical companies into market-oriented companies, since market orientation does make it more easy to motivate all workers to strive for the same goal.

Attracting compatible investors

There is a base law for business and industry, that says “shit always goes down”. In order to ensure we do the right things ourselves, we are ensuring purpose alignment from the top. The articles of association of Participium include an explicit statement that refers to our nature of long-term investment. We even have statements that allow us to exclude a main investor who is not in line with our purpose any longer. We are going to continue on this path, and are now creating a charter based on the values ‘trust’, ‘results’, and ‘passion’ that will refer to the purpose. And of course, when introducing new investors, we check first, whether they are aligned. Not an easy task, since ‘taking the money’ is tempting.

Interested to find out how this is going? Feel free to drop a line.

Tax shelter explained

Earlier this year Participium was a guest at Mazars for an info session on tax shelter for start-ups. The info session was aimed at (future) private investors who want to invest in young promising companies and fully exploit the tax benefits.

With his extensive expertise in tax & accountancy, Peter De Vos of Mazars comprehensively explained the legal and fiscal aspects of the tax shelter.

Because the attendees were very enthousiastic about what they had learned that evening and because we are convinced that the information can be interesting for any (potential) investor, we shared Peter’s full presentation (in Dutch) on the Participium YouTube channel and at the bottom of this news item. We have put the slides of Peter’s presentation in the video, so you don’t have to miss a thing of the interesting session.

Successful event on tax shelter for start-ups

April 27th Jan Lagast was invited as a guest speaker at Mazars for an info session on tax shelter for start-ups. The info session focused on (future) private investors who want to invest in young promising companies and fully enjoy the tax benefits the Belgium government provides.

It was a convivial meeting in the former living room of baron Braun on the top floor of the renowned UCO tower in Ghent, where the accountancy department of Mazars has its offices.

Based on his vast expertise in tax & accountancy Peter De Vos (Mazars) gave a clear explanation on the legal and the financial aspects of the tax shelter. Later Jan Lagast gave – from his first-hand experience as company builder with Participium – advice on how to inquire whether or not a company is worth your investment.

Afterwards, the public of (future) investors seemed very positive about what they had learned that night.

Investing from your easy chair

Last Thursday, May 26^th, Participium was present in the Maria Goretti church at the Blaisantvest in Ghent. This church was bought by non-profit organisation DOIC and made it a multifunctional meeting center. The conservation works have already been carried out. A beautiful new interior will be created through crowdfunding. For us it was a perfect setting to explain the difference between investing with a purely financial goal and investments that go far beyond money, but are all about involvement and creating value.

 

Omar Mohout states that the Belgian venture capital is doing well

Omar Mohout gave us an excellent summary of the capital investments in start-ups and scale-ups during the first quarter of 2016. He concludes that Belgium started the year pretty well. Good news, in times of a shrinking venture capital market in the US.

A few highlights:

• Belgium is ranked fifth in Europe as far as the number of deals are concerned.
• Belgium is ranked ninth in Europe for raised capital.
• Belgium has the highest number of B2B companies in Europe (75%). The countries where B2B is more dominant than B2C are: Austria, Denmark, Finland, France and UK. In the Netherlands this is 38%. Ireland and Italy are the most B2C oriented with 29%.
• The top 5 sectors of Europe are a replica of the Belgian startup ecosystem with one exception: manufacturing is ranked in the Belgian top 5 (in the European ranking this is security)
• The average year of foundation for Belgian technology companies that raise at least $1M is 2011, the same as France, UK, Switzerland and Sweden.
• Belgium is ranked 15th in Europe with an average amount raised of €3.2M. Sweden takes the first place, then Ireland and then Switzerland. The European average is €10M.

Some interesting European trends:

• Some countries that did well last year appear to stagnate. Spain for example (€ 500M raised in 2015) has € 27M for Q1 (Source: Novobrief.com).
• Europe performs better in Q1 2016 than in Q1 2015 (Source: tech.eu).
• Sweden takes the first place in raised capital thanks to a single company: Spotify. This company raised money 2 x this quarter: $ 500M in January and $ 1B in March.
• The UK leaving France and Germany far behind in raised capital. France is doing better. Germany is lagging behind in a number of deals.
• Northern Europe is doing very well. All Scandinavian countries, except for Norway, are ranked in the top 10 of both deals as raised amounts.

Mohout also focuses on Belgium:

• The total of the capital raised in Q1 is € 55M (of which € 51M consists of deals above $ 1M). 47% of the capital is for Flanders.
• The € 1M club consists of 15 members: Unified Post, Real Impact Analytics, Rombit, Epigan, Smappee, Icometrix, EMASphere, Molecubes, MyMicroInvest, PieSync, Approplan, Pronoia, Twikey, Intix & Social Karma. Nine of these are from Flanders.
• LRM, Internet Attitude and Pamica (Michel Akkermans) were the most active investors. With regard to crowdfunding, MyMicroInvest was the most active. They had, among others, a very successful campaign. In half of the deals business angels where involved.
• Walloon Brabant is on the 1st place for raising capital, with Brussels and Antwerp respectively on place 2 and 3. Together, these 3 provinces account for 71% of all venture capital in Belgium.
• For cities, the first place goes to Brussels, then Antwerp and La Hulpe. Ghent and Hasselt follow on 4 and 5. Together, these 5 cities accounted for 76% of all venture capital.

How does a growing SME find its financing nowadays?

share#square at Monard d’Hulst

The available funding for starting companies differs enormously from the growth capital being released for larger companies. For the growing Flemish SME as we all know it, it is far less evident to attract capital than for a promising start-up. Fortunately? there are still a few possibilities left, but as a manager looking for funding, you should be cautious.

How does a growing SME find its financing nowadays?

share#square at Monard d’Hulst

The available funding for starting companies differs enormously from the growth capital being released for larger companies. For the growing Flemish SME as we all know it, it is far less evident to attract capital than for a promising start-up. Fortunately? there are still a few possibilities left, but as a manager looking for funding, you should be cautious.

Bram Delmotte from Monard Law and Jan Lagast van Participium explain why:

Classic loans can also be smart money

The idea that a classic loan can be smart money initially came from Gust Van Put, former bank manager of HBK Spaarbank, specialist in employee participation and one of Patricipiums’ advisors behind the scenes. Years ago, an old French book gave him the idea not to work with shareholders, but with financiers who provide a loan. “Do not look for shareholders but bond holders”, he advised Jan Lagast over a good glass of wine. That advice proved particularly valuable. The team of Participium would experience this for themselves later that day during their first informal meeting with their financiers.

Together with a credit provider or a bondholder you make agreements about an interest and a repayment period. With that, the entire financial picture is resolved and it’s finally possible to talk freely about the future with that financier. Of course, that financier will be concerned if you come up with crazy ideas or if the financial information of the company is unfavourable. Yet in all other cases, that financier knows that this conversation will not get him paid a euro more… and therefore he or she does not have to start monitoring (thinking: “then I’m sure that entrepreneur is not making me gain less”) or putting pressure to reduce costs (because “then I’m sure I will get more out of it”).

Participium experienced that this leads to a very different kind of conversation, at their first meeting of financiers. Of course they asked some critical questions, but the mood of the evening was one of support and of thinking along. Thinking along about opportunities, possibilities, growth. That feels very nice indeed. The same conversation with shareholders would have definitely been much sharper and more arduous. That is because in every conversation with the shareholder, the financial return is also included in the balance. This is not the case with classic loans. If you regularly inform those lenders, involve them and ask them for support, that’s when you get smart money. Moreover, due to this financial calm in the collaboration, that money is much “smarter” than it would be with shares.

Louis Verbeke states that there is too little risk capital available in Flanders

Louis Verbeke, honorary chairman of the Vlerick Business School, retires as a chairman, he looks back on the history of the school and the business community on Kanaal Z. He made some interesting statements, hidden behind the misleading title of the interview – after all, he only talks a few seconds about Minister Geens.

Louis Verbeke states that the difference between right and wrong, for example, turns out to be much softer if you can compare with business people from all over the world. Vice versa, negotiating cultures are quite different as well. The Chinese, for example, would always ensure that in case of a takeover, the counterparty also wins something in the deal. That way they don´t feel like emerging as the loser. In the West, on the other hand, negotiations are played out to the last cent.

Part of the interview also deals with risk capital, and especially the lack of that risk capital in Flanders. Louis Verbeke indicates that legislation for shareholders is better in our neighbouring countries. In France for instance, the long-term shareholder benefits from a multiple voting right. And in Germany, the legislation is more favourable for shareholders. It’s worth the trouble to take a proper look at this, don’t you agree?

Watch the entire interview via this link to Kanaal Z

A different approach is necessary

In a little while, 20 entrepreneurs, managers, bankers and representatives from the civil society arrive at the first share#square at Participium. Guest speaker is Frank Demets (first from the left), who will give a vision on the future of business. He will do this looking back on his past as editor-in-chief for the newspaper ‘De Tijd’ and as a strategic communications consultant at Febelfin.

Some minutes ago, Lagast and Demets went through the presentation together. It looks good: Frank makes a stand for a different approach. In essence it comes down to this: entrepreneurs need better focus and better support, more funding is needed for that particular intermediary group between local traders and small businesses that can still find support with family and friends on the one hand, and the medium-sized companies for whom sufficient capital is available on the other hand. After Frank’s lecture, Jan Lagast will discuss this subject into more detail by indicating that Participium will turn a great idea into a company by giving it the right company vision and attracting the right people and financing.