It is not always obvious for (Belgian) start-ups to raise capital. That’s why Belfius, in partnership with Birdhouse, has decided to make no less than EUR 10 million available for our start-ups. But how does that work exactly? In this blog we combine four frequently asked questions and explain how things work.
What is the Birdhouse-Belfius Fund?
Belfius Bank & Insurance is a partner of Birdhouse. That is why the bank is making available no less than €10 million to invest in start-ups that participate in the Birdhouse accelerator programme. The capital has been available since spring 2018, so the initiative is relatively new.
Birdhouse reserves the right to co-invest in the participating start-ups through the Belfius fund. This is only a tag along right that allows you to participate, only if there is a next capital round. If you don’t need capital, you can’t be required to raise capital. The valuation of the investment, exercised by this resale right, is also not fixed: this can be discussed with other investors and of course with the start-up itself, at the time of the investment.
Why are Belfius and Birdhouse doing this?
Start-ups typically need capital to grow. Before, we could support them indirectly in raising capital, for example by opening up our network or offering advice. With this fund, there is now a direct way in which we can support our start-ups in raising capital.
In addition, this approach has a reinforcing effect. The Belgian investment landscape today is still too risk averse, and there is a need for more early-stage capital in the ecosystem. The fact that a major financial player such as Belfius is now explicitly backing start-ups may help to resolve this problem.
The approval of an institutional player like Belfius can count: if they decide to invest as a bank, other investors will come on board more quickly. It is certainly not Belfius’ intention to always be the sole – or lead – investor. This is in order to propel the start-ups forward in their growth stories, leaving enough free space for other investors during a capital round.
How does it work?
As with any investment process, a start-up has to pitch to the Birdhouse-Belfius fund (be sure to read our blog on raising capital here). A clear story, product and pitch are therefore indispensable. This fund has no sector focus; the emphasis is mainly on innovation and the ambition of the start-up.
Birdhouse will first guide the start-ups seeking funding from the fund through the various aspects of their pitch and proposal. After that, the start-up has to convince the fund management to give them capital.
Finally, the fund is mainly aiming for larger seed or series A rounds and therefore definitely places itself in the segment of early stage venture capital.
Is it only capital?
Certainly not. The Birdhouse-Belfius fund is the result of a broad partnership between Belfius and Birdhouse. Belfius supports Birdhouse’s structural operation and also offers our start-ups a range of support services, loans and insurance. Belfius offers banking and insurance advice and also gives access to other forms of credit not normally available to start-ups, such as bullet loans. This is a bank loan that is very suitable for start-ups, with the following features as examples:
- the loan amounts to 50,000 euros,
- the full amount of credit is only repayable after 3 years,
- it has a low interest rate,
- it doesn’t expect a personal guarantee,
- there are no additional handling fees.
- There is €10 million available to invest in the capital of start-ups at Birdhouse.
- As a startup, you still have to pitch to get capital.
- The fund does not have a sector focus, it is mainly about seed and series A capital.
- Birdhouse assists start-ups in the process of investment by Belfius, as well as in the process of raising money from other investors, by making our know-how and network available.
- The Belfius fund has an amplifying effect and can help convince investors to invest.
- It’s not just about capital: Belfius also supports our start-ups with advice, (bullet) loans and insurance.
Further support Birdhouse
In addition to the search for capital, Birdhouse supports the start-ups in the program with many other things. Among others via:
- 45 available workshops and events per program (6 months)
- mentorship by passionate and experienced entrepreneurs and top managers, with more than 2000 hours of coaching
- the range of services of
, with freelance CFO and marketing services tailored to your needs
- a very large network that is actively used on a daily basis to help the start-ups move forward
- a nice office space in Ghent or Antwerp
This approach is bearing fruit. Since founding Birdhouse in 2016, our startups raised over €7.5 million in capital. The Birdhouse-Belfius fund has been supporting this trend since the beginning of the year.