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While the local startup scene is still on a high from the successful second edition of Amsterdam Capital Week, some worrisome news has now come out of the event. During the event, Dutch fintech startup InvoiceFinance did research among a hundred different startups and scale-ups to find out more about their finances. The alarming outcome was that 68% of startups can’t seem to get their growth financed.
No money in the bank
These 68% of respondents have all indicated to need more funding over the next twelve months in order to grow. It also turns out that more than half of all startups still finance their company with their own money. And although Dutch ING Bank was one of the main sponsors of the Amsterdam Capital Week, 72% of startups do not even bother to contact a bank. Instead they try and find funding within their own network instead, or through crowdfunding or fintech. They may have a point, as of those startups who do try and get money from the banks a staggering 82% gets turned down. Another finding from the survey is that it can take a little while to find funding, as 91% of startups spends three months or longer searching for capital.
The main cost factor that startups spend their short term growth costs on are the salaries for more staff members. This is something InvoiceFinance can relate to: “That is exactly what we are doing as well” CEO and co-founder Sven van der Biezen says about hiring more staff. “That way you can improve your product and its scalability faster”.
InvoiceFinance well financed
InvoiceFinance, the company that did the research that came up with these numbers, is a Dutch fintech startup that helps companies get access to capital by pre-financing their invoices. Unlike the majority of the respondents in their research, InvoiceFinance is not in desperate need for short-term funding. Quite the contrary actually, as the company has recently raised € 3.4 Million through investment fund Peak Capital and through Kalo Bagijn, who is a co-founder of BinckBank.