VC Profile: CapitalT

CapitalT is headed by co-founders Janneke Niessen and Eva de Mol. Both partners have a background in entrepreneurship and technology: Niessen has experience as an angel investor and founded a number of companies and initiatives including InspiringFifty; de Mol has published a number of academic papers and also has experience in venture capital firms.

Their debut fund held a first close – the amount of which remains undisclosed – in February. Niessen told Unquote that the firm began fundraising in March 2019 and is targeting a final close in 2020. The fund has a hard-cap of €60m. "We have a lot of commitments already in the works and we are well on our way," Niessen tells Unquote.

The GP did not use a placement agent, but Zuidbroek provided legal advice. The fund will follow market standard terms and conditions, and will have a 10-year lifecycle with a five-year investment period.

The fund currently has 18 LPs and anticipates adding a further 10-15 by the final close. It has a minimum commitment of €500,000 and the LP base currently consists of entrepreneurs and family offices, including the founders of TomTom, Booking and Adyen. It also has several US investors, Niessen says.

For the final close, the vehicle aims to secure commitments from banks, funds and regional development funds backed by the Dutch government.

The fund will target a 4-5x money return for investors, said Niessen: "We believe that we can do really well, we look differently at teams and that has a big influence on the outcome."

Asked about the fundraise, Niessen says: "Raising a fund as a first-time fund is not easy – but it shouldn't be too easy, it's a huge commitment to investors and the companies you invest in. It's good that there is a strong process. We have a different approach through our model, so investors are really interested – they like the fact that we are focused on teams and we have a data-driven model for that. Since they recognise the importance of teams, they know how this can make a positive or negative difference."

Know your startup
The VC's data-driven strategy comprises an analysis of the dynamics of startup teams, based on research undertaken by de Mol during her PhD at VU University and University of California - Berkeley Haas Business School. Niessen says each core team member of a startup is invited to take a survey, which is based on more than 80,000 observations across more than 1,000 companies in five years. She explains the factors that the analysis focuses on: "Firstly, personality traits such as stress resistance, resilience and passion; secondly, human capital, such as industry and startup experience, complementary skills and knowledge; and thirdly, team dynamics, since without team cohesion and shared vision, you can put the smartest people together but it won't work. Key questions are whether people hold each other accountable, whether they speak up, whether they have the right form of conflict, and whether or not there are discussions about the content."

Niessen adds that the results can reveal a lot about the potential of a team: "We don't expect teams to be perfect, but it's important to know if there is something missing or if there are issues that people are not aware of. We discuss the results with the team, too, and objective analysis helps the discussion. Sometimes there are too many red flags and we don't invest – some people fall in love with a deal, but you need to augment your gut feeling with actual facts. When we decide to work with a team, you can immediately solve certain things. In many cases, it's an area people find difficult to discuss – but at an early stage, you can look at the numbers, but there is only so much you can get from that, you need to see if the people involved can be flexible, turn things around and make things happen."

The vehicle will now deploy equity tickets of €250,000-3m and aims to invest in 20-25 businesses, focusing on seed financing rounds. "The companies don't need to generate revenues, but there needs to be traction in different ways, such as having a client base lined up," says Niessen. A quarter of the fund will be held back for follow-on investments. It will generally provide equity investments but will provide convertible loans for smaller tickets, Niessen says.

The firm will target technology-based companies in northern Europe and the UK. It has deals in its pipeline and has already made two investments, according to Niessen. CapitalT invested in Netherlands-headquartered WizeNoze, which filters and assigns reading levels to internet-based resources for use in education and study. It also invested in pre-hiring assessment software business TestGorilla, a company that provides businesses with resources to test the skills of potential job candidates.

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