Yonca, what is the most significant development in the BE/EU entrepreneurial ecosystem in the last ten years?
The mainstreaming of the start-up ecosystem is, without a doubt, the most remarkable development we’ve seen.
Back in the day, start-up players were few and far between, and there was no true ecosystem to speak of. The UK was the only market where you saw a somewhat mature ecosystem.
Over the years, interest peaked and led to different types of organisations entering the start-up field, which created an ecosystem of interconnected parties. Today, every metropole wants to nurture unicorns. Central Europe and Eastern Europe are quietly catching up. But we still have a long way to go towards a thriving inclusive ecosystem.
Would you say we’re still dealing with a fragmented market in Europe?
Definitely.
We don’t have a Single Market yet – we’re moving towards it, but there’s still a long way to go. For instance, raising funds for a venture fund throughout Europe is not easy because every country has different regulations. That’s a definite obstacle that’s holding us back. Additionally, budgets in corporates and financial institutions are mostly controlled country by country – not on a European level.
How do you feel about the innovation and entrepreneurial ecosystem today in BE/EU?
Entrepreneurship is on the rise and that is exciting! More young people envision entrepreneurship as the next step in their careers.
The next challenge is diversity and impact. The whole world is evolving towards impact and change, but progress is slow. You also see an increased interest in impact tech, where companies intentionally use technology to do good for people and the planet. Things are moving. This year we saw the very first Impact Week in Belgium, an event where different players in the ecosystem joined forces for the first time. That energy was amazing. It felt like the start-up ecosystem 8 years ago. Now we need to keep the momentum going and run with it.
We already created the Impact Shakers’ Microfund to finance businesses that want to leave a positive mark on people and the planet and we started fundraising for a larger impact venture fund. Impact will be the only way to stay relevant.
In economically difficult times, we see that companies tend to retreat to their core, focus on the financials only and let some sustainability initiatives fall by the wayside. Do you think that’s short sighted?
Absolutely.
Covid showed us that companies that incorporate sustainability in their strategy were much more resilient than those that didn’t. Sustainability is protection against instability, as we saw with the energy shock. That shows that an impact economy is essential.
The financial world understood that and is rapidly catching up. BlackRock recently announced a $4.5 billion climate fund. When organisations like BlackRock start pivoting towards these themes, evolution is inevitable. I am convinced that within now and a decade, everything will revolve around impact economics. It is and will become the core business.
What can we do to make the entrepreneurial ecosystem in Belgium/Europe stronger tomorrow?
I’m repeating myself, but: impact and diversity.
We need more clear government priorities to invest in impact. The European level already changed its mandate based on the Green New Deal, but we need this to trickle down to all levels.
In terms of diversity, we need to strive for a more diverse entrepreneurial profile. There’s still one predominant profile with the same academic and socio-economic background that becomes entrepreneur. But we need more diversity and perspective to provide diverse solutions. At Impact Shakers, we are consistently working toward that. Our teams are deliberately diverse because of that same belief.
I do believe that policymakers can and must do more to strengthen the connection between regulation and finance and increase diversity funding. The European Investment Fund has integrated targets for (social) impact investments, but they could increase their diversity funding to support more female GPs in VC.
What do you expect will happen in the next ten years?
We are facing a paradigm shift, as a society and as wealth holders who are naturally more committed to creating impact. I am convinced that all unicorns will be impact players within ten years because it is the new wave in technology.
We have the data that show that both impact and diversity produce better returns. Now we just need to find the mindset to implement it and create the infrastructure that is needed to report on the outcomes and evaluate these impact goals.
Anything you are studying in particular?
We look at both supportive and direct impact initiatives. What we’re seeing: we need underlying infrastructure for impactful initiatives – things like better reporting and monitoring tools. On the other hand, there are direct plays like regenerative agriculture – think of precision farming – and access to healthcare in emerging economies that can make a huge difference. Those are two areas that we’re keenly interested in.
What do you believe 2032 will bring that most people don’t expect or believe in today?
- Carbon capture: “Well, we need to work on all fronts to bring our carbon footprint down. I do believe that carbon capture and storage is part of the solution. Several companies are already doing great work. These are definitely impact unicorns.”
- Alternative proteines: “Lab grown meat will be a game changer, we know we all need to eat less meat and fish for that matter, and I believe in a multitude of solutions of which this will be one.”
- Impact Infrastructure:”In order to scale the impact economy we need to build the infrastructure to support it. Think impact measurement and reporting, marketplaces for nature-based capital, but also providing training for the people that will work in this green economy.
- Crypto/Bitcoin:”I see a lot of potential within impact. There is a large group working on climate, building outside the traditional system, and working with DAOs and smart contracts. However, the implementation of it is still quite unclear, especially when you look at legislation. I am excited though about the fact that so many people are dedicated to this technology.
What type of tech spikes your curiosity?
I am particularly curious about how carbon credits will evolve and affect the real world and its financial system. If you look at any investment portfolio today, you’ll find lots of nature based capital in there, which is quite exciting.
As you can feel in all my answers, I’m convinced there is a strong link between climate and finance. Finance is a very important lever to bringing about change – so I’m very excited about every public or private initiative that uses finance to move things in the right direction.
Look at Salesforce, for instance and their recently launched Net Zero Platform. It’s a marketplace for voluntary carbon credits trading. I think that’s very exciting and potentially very impactful.
I want to reflect on how we can pioneer at that same level as well because I believe carbon credits will become an important currency in the future.
If you were to start your career today, which company would you join?
Because I think finance is so important in change, I might have stayed in banking a bit longer. However, I am happy with the path I have taken so far. It has led me to great things already and I believe many paths can eventually take you to the future you want to buid.
What do you appreciate most in working with the Cresco team?
Working with Cresco has been fantastic. I’ve worked with David & Cresco since the early days of the Belgian startup ecosystem, and he is an incredible ecosystem supporter and champion. It is also a great pleasure tackling our biggest challenge yet, raising a venture fund, together with Cresco. Working with them boosts investors’ confidence in our fund.
Nothing but praise for them.
