NOM and Investeringsfonds Groningen (IFG) are partnering with Cottonwood Technology Fund, an early-stage fund with offices in the United States and the Netherlands. The fund specialized in deep tech supports promising startups with venture capital, coaching and advice in realizing their (international) ambitions. "A proven party that invests in the earliest stage of a deep tech startup was not yet present in the region.
Cottonwood Technology Fund is a venture capital fund that invests at a very early stage in distinctive deep tech startups. In other words, in high-tech hardware startups that have just been founded but have disruptive and scalable technology. Often spin-offs from universities and research institutions. 'This is why we are extremely happy with the cooperation with NOM and IFG,' says Alain Le Loux, partner at Cottonwood Technology Fund. 'The Groningen region has a more than interesting technical university and appealing innovation clusters where relatively many high-tech inventions come from. But as elsewhere in our country, there is a lack of venture capital. Especially in the early phase when a startup usually still has product, personnel or customers. We try to fill that gap, where possible.'
Scouting and mentoring
Cottonwood Technology Fund's focus is primarily on medical technology, robotics, advanced materials, nanotechnology and cleantech. 'Our approach emphatically extends beyond the mere injection of capital,' emphasizes Investment Manager Marie Weijler. 'The founders and inventors are usually technically excellent, but often have little or no commercial experience. With the help of our network and our experience with international business development and venture building, we are therefore firmly committed to helping them find their way in entrepreneurship. At the same time, together with NOM and IFG, we will set up a screening program to scout and guide scientists with revolutionary inventions at an early stage. Simply because we want to be at the table early on.'
Fund manager Jan Martin Timmer of IFG sees two main aspects coming together in Cottonwood Technology Fund: the courage to persevere and making choices based on an extremely careful analysis. 'This mainly involves looking at the market, potential turnover, intellectual property and whether the startup actually solves a relevant problem,' he clarifies. 'Of course, IFG has built up a nice and varied portfolio over the years. But a proven party investing in the earliest stages of a deep tech startup was not yet present in the region. Moreover, Cottonwood Technology Fund has a large international network. For example, there are contacts at the highest level with some 80 corporates and there are also four corporate venture teams investing in the fund. They are obviously going to open up that network to our region as well. That's great, because normally for startups with international potential these are very valuable sounding boards.
Open coffee hours
The collaboration had only just been clinched or a complete plan of action had already been developed by Cottonwood Technology Fund. Among other things, the fund will join regional startup events, meetings and master classes. 'We also organize open coffee hours for deep tech startups in need of coaching and advice,' Le Loux says. 'But also researchers who are considering starting a startup, but are not yet daring, can contact us. We want to make the threshold as low as possible to engage with us about setting up and funding a startup. When will the collaboration with NOM and IFG be successful? When we can create some nice successes in the near future and we have demonstrably contributed to raising the level of ambition.'
In this white paper you will learn:
- What you have to deal with when you start working with investors
- Differences and similarities between bank funding, subordinated loan and equity capital
- In what ways NOM as an investor can help you
Please note that this whitepaper is only available in Dutch at the moment. We are in the process of translating this whitepaper.