Meet Reinder Lubbers, Founder of No Such Ventures and a tech2impact Strategic Member, and learn about his personal journey towards venture capital (VC), approach to investing, outlook on the future of the investment industry and impact tech, as well as advice for aspiring founders.
Tell us a little bit about yourself and your journey. What inspired you to start No Such Ventures?
When I was a student in the Netherlands, I first started rowing by accident. There’s a longer story behind it, but in a nutshell, I was having drinks at a study introduction camp and a girl from the Rowing Club told me – after quite some beer – that I should consider rowing. I thought to myself that I might as well try and then it all went quite fast from there. Four and half years later, I found myself at the Olympic Games in Beijing.
I rowed professionally for a couple of years. Then, I started my investing career in private equity. At the time, venture capital wasn’t very well known in the Netherlands yet, whereas everyone wanted to do private equity. I always knew I liked investing, but I found the initial dynamics of private equity, my team, and the companies we invested in a little too conservative for my taste. Later, transitioning to M&A – buying and selling companies – allowed me to gain some handy experience. Still, I knew pretty fast that I didn’t have the ambition to continue my career there for an extended period.
At that point, more and more of my friends started working in startups, whereas former colleagues transitioned to venture capital. I joined a Dutch VC firm where the interesting and action-oriented work was well-suited for someone like me who likes getting things done. Overall, it was there that I realised that I love venture capital, but I also came to know that it is often not done in a refreshing or disruptive way. For example, in the Netherlands, there are numerous VC firms, but they follow a standard investment thesis: they tend to invest with a team of between 6-8 investors, their geographic focus is predominantly local, and they mainly do the same things in terms of investing in preferred shares, in the same type of companies. The US, in comparison, is both a much more active investment market as well as an innovative one, in terms of types of investments – groups of angel investors or firms raising money every quarter are much more common, and investing in more hardware, B2C, and other types of companies.
So, I thought to myself: let’s be the new guys on the block! All the firms I previously worked for always had fund mandates – which is typically done to please the risk-averse investors that invest in those funds – but this wasn’t how I wanted to proceed. In both my professional and personal experiences, most cool opportunities came from my network. It could have been someone I knew from a rowing club now living in a country like Denmark or Romania – it could have been anyone. They could have a nice company – or know someone who could have a nice company active in sector X, Y or Z – and ultimately that’s all that should matter. You don’t want a fund mandate with restricted timing getting in the way of new opportunities, but that’s often what happens.
As a former athlete, I have a very result-oriented mindset. To me, the result is all that matters – everything else, and how we get there, is irrelevant. In that sense, the name No Such Ventures is a bit of a wink. As in, we are trying to do things in a different way and not let opportunities or progress get away from us because we copy the behaviour of how others do it.
Can you tell us a little bit more about No Such Ventures and how you approach investing?
No Such Ventures is three years old with an atypical business model. In our first year, we invested in a company whose management I knew. Once the investment was done, they also asked me to become the COO. At first, thinking of No Such Ventures, I said no. The morning after, however, I said yes, because it seemed like a great experience where I would get to work on scaling up. Fast-forward a year later, and that company had grown from 75 to 150 people, following which it was sold to a listed UK company. This was a great first exit experience for No Such Ventures, but I also learned a huge deal on a personal level from an enterprising perspective. I think this tells a bit about our overall entrepreneurial DNA and company mindset.
In the last two years, we have been in the process of expanding – in terms of team size, number of investments, and size of investments. What distinguishes us from other venture capital firms is that we co-invest with a big group of befriended angel investors. We ourselves do not physically own the funds, but we have always been able to raise the money required to invest. Having initially started with 20 investors, we now work with over 100 who invest with us on a per-deal basis.
We offer flexibility to members of our investor network: They can choose whether to invest in our deals and they can also choose what amount they wish to commit. In terms of investor activity, we – as a VC-managed network of angel investors – could be said to fall somewhere in between the relatively passive pension funds and distinctly active angel investor entrepreneurs.
This year, we have finalised four deals for over €15 million. Each of these companies has received investment from a minimum of 20 angels, who also bring their respective knowledge and expertise to the table. And we think that’s hard to beat.
Why do you see impact tech as an investment opportunity?
The answer is twofold. For one, in all honesty, we like to define ourselves as entrepreneurial investors. We do not have a specific focus, because we don’t want to limit ourselves to a certain set of investments as we are not sure where the best opportunities lie. And oftentimes, the best opportunities do not lie with standard SaaS, B2B, or marketplace companies. We have previously invested in windmills because the opportunity presented itself in an attractive company with millions in revenue that looked for minority funding. As a production company, it was never going to fit the criteria of a VC seeking 10x returns within a year, but at the same time, private equity – that likes production – doesn’t like minority funding.
In that sense, the company fell out of most buckets, but we considered it a nice investment, even though the promised returns were a little lower than something in the likes of B2B SaaS. However, we liked the entrepreneurs and so did the rest of our team, which is another critical driving factor of our investments. In conclusion, I could say that we are not only focused on impact, but we are very much open to it.
Is it true that your whole team can also personally invest?
Yes, we all personally invest, and we all also have “our skin in the game”. A personal pet peeve of mine is when private equity or venture capitals do not allow their employees to invest before they have, say, 8+ years of experience – I find that incredibly old-school. It also seems to indicate a lack of trust. I suppose one of the pluses of creating your own company is that you can arrange certain things exactly as you like, which is what is done.
What do you believe are the biggest challenges or obstacles of the investment industry at the moment?
The level of competition, for one. If you ask VCs, we may often say that there is more money than interesting companies coming on the market. In that sense, interesting deal flow can be a challenge. This often encourages reflection on the part of the VCs to pause and ask ourselves: Why are we special? Why would companies want our money if they can get it from other sources?
Some VCs in the Netherlands, as mentioned previously, tend to stay the same; whereas others are experimenting with other services or expanding their geographical footprint. This is another industry trend – this diversification in both investment focuses and geography. From an entrepreneurial perspective, if I could select between a VC with a Dutch network and a VC with a European network, my choice would be quite simple. This can probably also tell you a bit about our own ambitions.
How do you see the industry’s future?
Investment speed is picking up, which is good for startups. I immediately also want to mention that – as a startup – you should not assume that the process will go fast. It can still take between 4-6 months. However, it is speeding up due to the greater number of investors available.
Back in the day, investors were also a little bit more arrogant. They were aware that the entrepreneurs were hoping to get money from them. Now, the tables are turning a bit, which is a very positive movement and shift in the power dynamics for startups. Speed and evaluations are increasing and VC terms become less stringent and tight. At the same time, VCs are also having to be more clear about whether, and how, we can provide a value add.
What did No Such Ventures decide to become a tech2impact Strategic Member?
We like to see interesting communities – with lots of events and initiatives – being built. Secondly, this can also be helpful to our qualified deal flow and matches. Lastly, we do not shy away from impact investments, and we like the opportunities to meet interesting companies.
What would your advice for future founders, investors, and other players in the impact investment space be?
First of all, get a good Subsidy Advisor on board, because that can be very beneficial for finding out what local or European subsidies may be unlocked.
At the same time, I think there is a big trend that more and more investors want to invest in impact. This holds true on both a VC level and a family office/pension firm level. This is to say that there might be a large pool of interesting investors available, so it pays to look beyond the traditional route of just VCs.
Lastly, I also think that founders sometimes go out into the market with huge valuation expectations. Interesting companies often begin with a very substantial ask, only to revert back a couple of months later, saying they need less after having done “new calculations” since they were unable to secure their initial unrealistic expectations. This essentially means that months had been wasted, whereby the founders also lost some negotiating power. Therefore, my tip would be not to go crazy with expectations, consider just how much funding is truly needed as well as securing a second opinion from an expert. Should you get serious interest, you can always increase the valuation in the process.
Is there anything else you would like to tell our readers?
I would suggest not forgetting to have fun, throw a party, and let loose. You can always continue working because work never stops. Especially in these times – with the pandemic still very much at the forefront of our attention – this is something that is very much appreciated.
My final piece of advice, from a founder’s perspective, would be to truly understand your prospective investors, conduct reference checks when necessary, and always keep in mind that it is very important who you let to your cap table.