Risk Talk with Victor Lubbers - VC at No Such Ventures

“So, first a little disclaimer. You have disclosed that after you worked at NSV the entire summer, you will return to studying once more! How did you reach that decision?”

“I've loved student life since the moment I came to Groningen. I started studying in Amsterdam but got lost in the big city. In Groningen I feel at home, perhaps a little too much at home, because it took me six years to finish my bachelor’s degree. Not something I’m proud of, but I definitely got to develop skills while doing extra-curricular activities like competitive race rowing at Aegir, a board year at RISK and an M&A internship at KPMG. I feel like I’ve seen a lot of different things but now it’s time to focus on my Master’s. I’ve just started the MSc Finance and my aim is to pass it within a year. Although, past experiences have shown that this will be a tough challenge, but I’ll try my best.”

“Alright, but now about your time at NSV. What can you tell us about that firm?”

“NSV is a venture capital firm which invests about 1 to 5 million euros in start- and scale ups. Mostly scale ups because these firms have a working product but need the capital in order to scale up and get the revenue going. The firm is started by Reinder and Bart, who is a rowing buddy of his. They met at Aegir, the rowing club in Groningen, and after their studies they both went their own ways. Reinder worked at Kempen, and after a couple of years he and his rowing friend saw potential in the VC business and desired to start one for themselves. The name No Such Ventures says it all. Reinder wants to give a funny edge to pretty much everything, this is made clear by the name as well as in the way they work. 

“Touching on what you said in your last sentence, what do you think distinguishes NSV from other VC firms in the Netherlands?”

“We are often told that our team is quite young. My brother is the oldest at 35 years of age and the youngest is 24. Our young team provides for a flexibility and a speedy response because at NSV we like to get things done straight away. Moreover, investors in NSV are not only investing their plain cash but also their expertise, knowledge and connections. When for instance an appealing firm in a certain promising sector is looking for money, NSV won’t solely supply this money. Instead, we will try to match this firm with the right person in NSV’s partner base who has expertise in this branch. What we aspire at NSV as well is that we will try to help firms even after we invested in them. We like to be actively involved in all our projects.”

“NSV consisting of such a young team also shows in the way you approach social media. With the funny graphs Reinder posts on his LinkedIn page for instance. Would you say that NSV also attracts a different type of firm because of their distinguishing approach to VC?”

“Yeah, maybe! In the beginning, the social media presence was not great. First, Reinder and Bart ticked off the major boxes on how to run their firm. When others and I got involved we got to focus on things like social media. Moreover, we as a firm are rather Dutch. In the sense that as soon as we notice that a potential client is wasting our time or we might not be their perfect match, we will just say so. Communication is rather clear and open which does certainly attract a specific crowd.” 

"The name No Such Ventures says it all. Reinder wants to give a funny edge to pretty much everything."

“Does this entail that the type of firm NSV likes to work with is somewhat the same as to how NSV would like to be approached themselves?”

“No, not perse. We are first and foremost looking for companies that are profitable and that have a proof of concept (POC). But this can be in any sector. Also, if you look at our investments so far, you can see how diverse the portfolio is. For instance, we invested in a provider for TV applications, a company that installs solar systems, a company that installs wind turbines and the Greek version of ‘Marktplaats’. These are obviously totally different sectors. But the people behind those companies are very important. It does not matter if they are old or young, male or female, Dutch or from elsewhere. It matters that we have a feel for the entrepreneurs. So, we always start by wondering if we can have a good connection with the client.

“Sounds awesome! During your time there, what was your position?”

“Reinder and Bart started the firm in 2018 and were mostly doing everything themselves in the beginning. In 2020 they wanted to expand and were looking to hire. Earlier this year an analyst, Raoul, was added to the team. And as I came to NSV in April, we worked a lot together. I basically got a lot of orders from him. I came as an intern in the beginning and had a lot of different tasks. Raoul and I started off by digitalizing systems, like the CRM system which previously consisted of a simple excel file. Besides that, I ran a lot of models for different companies we were thinking of investing in. In that time, we didn’t do a lot of outreach real flow to companies, but most firms contacted NSV. This also took up a lot of our time.” 

“So, firms came to you, would you say that this is a luxury position?”

“For a lot of firms, the world of VC is unknown. Normally, firms would approach several VC firms and they hope for the biggest bag of cash. NSV desires a good connection with the company they’re investing in. It is all about the feeling in that sense. Previously, I did an M&A internship at KPMG where we had a lot of major companies where the financials made a lot of sense. But now we are looking at start-ups and scale-ups whom are often in a loss from the beginning and they have the desire to make investments for the future. Therefore, we have to make a decision solely based on red numbers and the connection with the entrepreneurs and their idea becomes increasingly important. The funny thing is that the forecasted financials sent by companies who are looking for investors are always in their favor. They will never say that they will make a loss in the next few years. So, when running a model to assess the risk involved with taking on this company you have to take into account that they will probably tell a story that is well in their favor. Based on the models you decide on what you’re going to offer them, but there is definitely some risk involved.”

"You have to take into account that they will probably tell a story that is well in their favor."

“Do you believe that the main reason NSV prefers investing in scale-ups is because of the lower risk involved associated with having a POC?”

“There are also a lot of really small startups that are looking for 25k to 100k and generally the risk associated with investments in these firms is even higher because they don’t have a POC. But if you’re funding the right firm, you’re in for an even cheaper price. Going in for 1m to 5m definitely gives more certainty as there often is a POC. I think investing earlier costs less money but is certainly a lot riskier.”

“Most of the Risk Magazine readers know you as the Chairman of the Risk Board 2019-2020. Are you still involved at Risk? And how would you say that your position on this board has prepared you for your work at NSV?”

“Yes, my board year was fun. Currently I am only on the supervisory board where I sometimes give tips to the current chairman, Douwe. Besides that, I like to attend the Investment and Accountancy Evenings and going to socials. But that’s it as far as Risk goes. During the year in the board I wanted to find out what I wanted to do later on. But because of the hectic year every board encounters, I had less time to focus on picking out my desired career path. I did attend the Dutch Banking Tour as well as the London Banking Tour where I got a feeling for the world of investment banking which were both great experiences. I have found out to have a strong appetite for jobs in Finance, but which one it is going to be is still a question yet to be answered. When Reinder called that he was looking for an intern I was very happy to do it. During the board year, of course I had a lot of responsibility and communication was always key. Which made having a lot of responsibility at NSV straight away, and working from remote, rather easy to cope with.”

“You mentioned some of the projects NSV took on. Can you disclose, within confidentiality limits, which one specifically you liked working on and why?”

“A company I liked a lot is one that provided an online service. It was interesting and I liked it because I got a lot of responsibility during a busy period for NSV which meant that I got to do a lot of things on my own. Of course, I was always checking in with others at the firm if I was doing the right thing, but still I was doing the majority of it. What I liked as well is that I was always involved in the phone-calls and had a lot of say. It is nice to have your opinions valued. Eventually we did not invest in that company, but I took a lot out of it myself which was amazing. Another case interested me because one of our portfolio companies was thinking of doing something in a totally different branch. They had little information, so they came to NSV with questions on how to approach this project and asked if we have the right network to help them.”

“Does this mean that NSV does not shy away from companies who don’t have it all figured out yet?”

“Definitely! A lot of the firms know they need money but are very unsure about how to use it. So that’s why I said we are not shy to give our opinion if we for instance believe the revenue can be made in a different way than they proposed. Of course, afterwards we will also have to work with each other, so we believe that being truthful and honest straight away is beneficial to both parties.”

“Could you paint us a day to day picture during a packed schedule at NSV?”

“The most interesting day would be the Monday. It is interesting to see that during the board year we had long board meetings of sometimes even 4 hours. I noticed that this was not my piece of cake because during meetings mostly 1 or 2 are speaking and the others probably doze off. At NSV we had really short meetings, always on Monday at 10 o’clock. We discussed the ongoing projects or the potential projects we might take on. It took about an hour for everyone to ask the questions they had. Afterwards, we prepared for a call which was lined up for a firm that was looking for an investment. This firm introduces itself with a so-called ‘pitch deck’ in which they send a document to introduce themselves, what their goal is and their financials in 10 to 15 pages. In a google document, my colleague and I would share some thoughts on what we think of their financials and their future plans. Then we have that call, at let’ say 1 o’clock, for about half an hour maximum. We like to have a cap at half an hour because often we have entrepreneurs talking a lot, and time is valuable. Afterwards, we will discuss internally whether we would really dive into the company or not. Then the rest of the day, I would be doing research on LinkedIn etc. looking for new investors. Checking if they wanted to invest in NSV to enable us to invest in companies seeking for capital. In the end, 8- or 10-hour working days are not standard at NSV. We are very flexible on our time and without push-back we could say that we like to take time off from 1 till 5 and work those hours on a Saturday for instance.” 

“Would you say it is an advantage or a disadvantage to be working in close contact with your brother, Reinder?”

“It was not that much an advantage or a disadvantage because I had a lot of contact with Raoul, the employee working as an analyst. So, Reinder was obviously giving a lot of tasks to Raoul and him on his turn was dividing those tasks among himself, and me. As it turned out I did not have a lot of contact with Reinder which I believe is a good thing because we’re still brothers. I have a great relationship with him but I'm not sure if work and private should come too close to each other. It was funny to notice that previously on the weekends you were just hanging out with each other and now we are mostly discussing work. Reinder is way smarter and way further in his development than I am. So, if it comes to a family firm at some point, I need to definitely up my game a bit. Besides, our working styles differ quite a bit. Reinder is never not working and I am often surprised that he isn’t burned-out yet. So, a family firm? I would say maybe. We’ll see!”

"It was funny to notice that previously on the weekends you were just hanging out with each other and now we are mostly discussing work."

“Now that you’re leaving NSV, do you think you might ever come back?”

“Well, that has not really been discussed. I said to Reinder, I want to focus on my MSc degree whilst still helping out at NSV where needed. But it is not going to be the full-time work I did during the summer. But it will also depend on where the firm is in five years and where I am in five years, but it could happen.”

“Do you at least see yourself working within the VC industry in the future? Or doing something completely different?”

Good question, I think it is still tough to say. Often when you hear people talk about the work they do, they say they really like the contact they have with the companies and the people involved. Like I said in the beginning it is a human to human business. You have to decide on what you see and hear whether this is going to be an interesting investment or not. The human to human contact is way higher relative to private equity as well as M&A, which is something I really enjoy. It is also an interesting sector where there are a lot of good candidates but not a lot of spots to be filled, which makes it a hard world to get into. But if you get a spot it really is worth it. So, a lot of unknowns. We’ll see if I will end up in VC or not.

“That brings us to our last question Victor. What advice would you give someone who desires to pursue a career in the VC business?”

“Well, it is not really VC specific but for whatever job it is always vital to really know what industry it is. You can achieve this by talking to people who are or have been in the industry you’re interested in. This all helps in generating a clear picture for what you are applying for. Obviously, for VC specifically you have to love the human contact and your motivation to start in the industry has to be correct. As far as background goes, your background does not have to lie in Finance per se. Recently we had an MBA intern from Barcelona at NSV. His MBA was in solar technologies, but he got to grips on the finance part of VC rather quickly because it is not die-hard financials in venture capitalism. If you have great energy and you can show it, you will be all right!”