Butter Bridge wants to recover critical materials from industrial waste streams. It proved difficult to clearly communicate the startup's story to investors. The Investor Readiness Program (IRP) had to provide the solution. "Our pitch was adapted pretty heavy-handedly.
It is a sunny morning in August as Steef Steeneken and Harmen Oterdoom sit in an office on the Oosterhorn industrial estate, southeast of Delfzijl. The space has something makeshift about it, as you often see with startups. "This has kind of become our home base," the founders of ButterBridge smile. For now, that is, because soon they will be moving.
'We will soon establish ourselves in the Chemport Innovation Centre,' says Steef. 'That was one of our wishes from the beginning. Because there you have several innovative parties sitting together. Moreover, the region is favorable for our activities. You have the port connection and you are also in the immediate vicinity of parties who have a lot of knowledge of high-temperature processes. And that is exactly what we are also engaged in with Butter Bridge: recycling critical raw materials using high temperatures and green energy.'
More specifically, Butter Bridge wants to recover valuable metals such as copper, nickel and zinc from industrial waste that the Netherlands normally exports. 'These residual streams now mostly end up in containers to countries like India and Vietnam, where they are processed under poor conditions,' Harmen explains. 'Then Europe buys the same materials back from China and Russia. A bizarre situation, of course.'
First prove
The startup wants to break this cycle with electric furnaces that can be heated to 2,000 degrees Celsius. The cleverness lies mainly in the approach: processing different types of industrial waste one after another in the same installation. Each individual waste stream is too small to build an entire commercial plant for it, but combining them makes it profitable.
To realize their plans, funding is logically needed. However, attracting investors proved more challenging than expected. 'In your enthusiasm you quickly walk in everywhere,' Harmen acknowledges. 'But you are just as quickly outside again. Initially we wanted to build a commercial plant right away, but investors thought our story was too complex and our plans too capital intensive.'
The lesson was clear: first prove it works, then scale it up. So take a step back and show with a Proof of Concept installation that they can make it work. Still: it may make Butter Bridge's story more understandable, but not necessarily more attractive to investors who typically prefer shorter development times, lower initial investments and a faster return on investment.
Understanding dynamics
How to proceed? That challenge eventually led Steef and Harmen to NOM's Investor Readiness Program (IRP). The IRP is a customized program for startup founders who want to learn how to successfully attract investors. Among other things, it helps them understand the dynamics of the investment process and better tailor their story accordingly.
'For us it was especially important to learn to understand the language of investors,' Harmen explains the reason for participating in the IRP. 'If you're not involved in that on a daily basis, it's sometimes abracadabra when you're talking to each other. We really don't have to become financial experts, but we do want to know what it's all about. It's like doing business with French people. It's easier if you speak a little French. You just have to do your best to communicate with them and show that you want to understand them.'
Frustration
Harmen and Steef know each other from their former studies in mining engineering and petroleum extraction at TU Delft. The contact has always remained, despite different career paths in the world of metallurgy.
'We had both become quite frustrated from the beginning of our careers by the fact that in Europe we were shifting industrial waste away to countries with worse labor and environmental conditions,' Steef argues. 'While we ourselves maintain a luxury lifestyle. In the 80s and 90s it was : just get rid of those small processes, then we won't have that hassle. Now it's cherry picking all day long. Do this residual flow, a bit of that and not that. Only: we don't have that luxury anymore.'
That frustration was a primary driver behind founding Butter Bridge. On top of that: current world political developments make it increasingly important to become less dependent on Russia and China for critical metals.
Still, convincing investors proved to be no easy task. Especially because the technical concept was often difficult to fathom for non-techies. The IRP brought Harmen and Steef back to basics: how do you tell your story in such a way that investors understand it?
Learning and listening
They have now gone through the entire program. What has it brought them so far? 'The IRP has taught me that you don't have to reinvent the wheel,' says Harmen. 'Everywhere you go you often think: what is happening to me now? But during conversations with the other participants you quickly find out that your problems are not unique. Founders often face the same challenges. At the same time you learn to ask for and accept help. You don't have to do it alone. In other words, you have to stay open to feedback and the input of others.'
As for Butter Bridge's story toward investors, to what extent has that changed since the IRP? Quite a bit, as it turns out. 'Leonie Ebbes, business developer of the NOM, helped us tremendously with that,' Steef points out. 'Just until she completely understood it herself. Yes, our pitch was adjusted quite harshly. It has meant that we can now also articulate our challenges in a better and more accessible way. I am convinced that our participation in the IRP will make it easier for us to get to the table with investors. After all, it shows that you are willing to learn and listen. Investors have no use for founders who stubbornly go their own way and think they know better every time.'
Step on the gas
Last March, shortly before the start of the IRP, Butter Bridge received an electric Proof of Concept furnace. With the installation, assembled by Steef and Harmen themselves, the company plans to begin recovering critical materials from industrial residue streams on a pilot scale after the move.
'Funding, of course, remains an issue,' Harmen states. 'We are really looking for long-term investors who understand our industry. At the moment we are busy trying to get an RVO grant awarded. If successful, there is a good chance that co-financing will soon follow. If the subsidy does not succeed, then we will keep accelerating and hope that someone jumps on our train.'