Private equity firms
A private equity firm manages the assets of institutional investors and investment funds. Private equity funds can be worth tens or hundreds of millions of euros and tend to have an investment period of around 10 years. Using their funds, private equity firms actively invest in promising businesses. Private equity firms usually invest millions of euros in businesses. This is how private equity firms work.
The capital that private equity firms invest is called Private Equity. Some firms invest in startups or fast-growing businesses. These firms are usually called Venture Capital funds. Some Dutch provinces have their own private equity firms, known as Regional Development Agencies (ROMs).
Investment size
ROMs and Venture Capital funds usually make smaller investments starting from €250,000. Private equity firms usually have a minimum investment of €1 to €2 million. Over 80% of all investments by private equity firms are under the €5 million mark. Occasionally, private equity firms also target larger SMEs.
Influence and control
When a private equity firm takes a stake in a business, they actively contribute their knowledge and money. They expect the company to increase in value over time. That is why they share not only their money, but their knowledge, experience, and network to make this happen. Working together with the business owner, they try to take the business to the next phase. Private equity firms usually specialise in one specific phase or sector.
Government safety review
Since 2023, the government reviews all investments that pose a risk to national security (Investments, Mergers and Acquisitions Security Screening Act, Vifo). The safety review applies to 2 types of businesses in the Netherlands:
- essential businesses
- businesses that possess sensitive technology
The safety review applies to investments from all countries.
Dutch Association for Private Equity and Venture Capital
The Nederlandse Vereniging van Participatiemaatschappijen (NVP, Dutch Association for Private Equity and Venture Capital) represents 90% of all private equity and venture capital assets under management in the Netherlands. The NVP has about 70 members and has a useful list of all their funds.
Seeking investors
When you go looking for finance, make sure to look closely at the required criteria. Use the financing flowchart to select an alternative form of financing that fits your situation.
Help with financing
Getting help increases your chances of financing. With the right adviser and a good financial basis, a 'yes' to your financing application is within easy reach. These advisers will help you on your way.
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Questions relating to this article?
Please contact the Netherlands Chamber of Commerce, KVK