BC column web Anton van Rossum

Anton van Rossum 

24 April 2019

M.I. asks:

A few years ago, I started a semiconductor start-up with a few other PhDs as a spin-out from our technical university. Our technology will lead to a significant reduction in energy consumption within a number of wireless standards and improved performance. The prices will be competitive because we work in CMOS.

We’ve spent several months talking to VCs for our series A round, but no results have yet been achieved. Although our business case is very strong, it seems impossible to convince investors. The most important reason is the trade restrictions the US has imposed on Iran. Some of our company’s key figures have an Iranian background. However, our IP is of Dutch origin and is patented in Europe. There’s no advantage for the Iranian economy at all. At the request of potential investors, all possible links with Iran have been eliminated, but this was not enough in the eyes of the Dutch fund.

We’re now standing with our backs against the wall. We don’t know what else we can do to meet the investors’ desires. Our technology is not even on the IP list that falls under the embargo, as the primary focus for application is in the field of the (industrial) IoT.


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We recently came in contact with Chinese investors. We expect a lot from this: not only is China a very interesting market, but they have sufficient financial resources and they’re willing to invest. I believe that if we can secure funding, our market strategy will be completely turned upside down.

The headhunter answers:

It’s likely that more than just your market strategy will change. I recently heard of a start-up in a similar situation. Financing was contingent upon moving the IP into a holding in Hong Kong, while a design team would be set up in China. In the proposal, the founders would get a minority share and the company’s focus would move to the other side of the world. Such a scenario means that the Dutch inventors completely lose control of their company and, moreover, completely lose sight of the business activities. Agreeing to the deal would merely imply facilitating a “Made in China 2025” program.

This form of “financing” is not new in itself. You also see this regularly with acquisitions by American companies. In the beginning, not much changes after the takeover, but after the “technology transfer”, the European site is often closed.

You may wonder if this is what you want, but in your situation, you don’t really have much choice. On the other hand, you are not bound to the Netherlands. There’s really nothing that stops you from setting up a design center in Asia and accepting an offer – as long as it’s good enough.

All in all, this isn’t a situation that’s in the interest of the Dutch (European) knowledge industry. I find it very sad that inventions made at the technical universities are put on sale for next to nothing, due to a lack of available funding in the Netherlands. I can imagine that from now on the universities’ valorization institutes will be even more careful than before when hardware start-ups apply for seed capital.

For VCs, this has been a trend for quite some time. High tech (including semiconductor, equipment and med tech) has a significantly longer time to market, a higher financing requirement and a high risk profile compared to the software industry. That’s why there are so few semiconductor start-ups in the Netherlands – it’s not because of the lack of good ideas.