Paper on the Rocks & private investor Tamara Straatman
For the afternoon’s first exploration of best practices in startup-investor collaborations, Paper on the Rocks founder Anne Pleun van Eijsden was joined by private investor Tamara Straatman, a member of impact investing community PYMWYMIC and international impact investing network TONIIC. Paper on the Rocks makes tree-free notebooks from construction and agricultural waste streams. Through its circular products, Paper on the Rocks wants to pressure the paper industry to change.
After taking part in Impact Hub Amsterdam’s Investment Ready program, Paper on the Rocks completed its first funding round with an investment by PYMWYMIC. And soon after it teamed up with an angel investor from the B Corp community and Tamara herself, both of whom joined PYMWYMIC.
ON TRUSTING YOUR INSTINCT AND TRUSTING YOUR PARTNERS
Tamara first met Anne during a private capital event organised by two Dutch banks. After the presentation and Q&A session of Paper on the Rocks, Tamara instinctively knew she had come across a strong investment option. “I believe that when someone has a strong mission and is intrinsically motivated, it will always work” said Tamara, who revealed that she only later did she have a look at the startup’s financial plan. “Always trust your instincts”, the investor added.
As someone new to being an angel investor, Tamara realised that entrepreneurs look for funding, but also skills, a network and coaching. As an NLP trainer, she also believes that success is 80% mindset and 20% knowledge. Thanks to a friendly founder-investor relationship based on trust, Anne and her team can share problems with their investor: “We overcome difficult moments to keep the trust and move forward,” Tamara explained.
To help build this trust, Tamara also met the other investors of Paper on the Rocks before signing an agreement. Thanks to the theory of change Paper on the Rocks made with PYMWYMIC, it became clear that any collaboration would be a long-term engagement. “I feel I will be involved for about 10 years. You have to work together from the start and for a long time to make it a success. To me, Paper on the Rocks will become a household name, like Nike or Adidas.”
And Anne is equally committed to this partnership. “I’m not looking for a quick exit. We are building a vehicle for changing the paper industry” she added. With such a strong mission, Anne has to be selective in choosing investors driven by impact: “Some people feel that they are impact investors, but when you look at the type of impact, they are still more focused on ROI”.
FEED-FORWARD FROM THE AUDIENCE
In a facilitated interactive session, Anne shared with the audience that her crowdfunding campaign just launched and asked for input on: How can Paper on the Rocks leverage the different investors and crowd to attract further investment for international expansion?
After small group conversations, the audience shared some insights that could be useful to Paper on the Rocks:
- To attract further investors, the enterprise should build on the credibility it has already acquired, thanks to having a strong first mover such as PYMWYMIC on board. Current investors have large networks and can introduce Paper on the Rocks to new financiers that share the same impact goals as the current group.
- Another suggestion for additional funding was to share the wealth and leverage the bond Paper on the Rocks has with its clients. For a minimum amount of products bought, each customer gets shares in the company; clients would feel happier about purchasing and earn as the enterprise grows.
- In terms of international expansion, Paper on the Rocks should embrace a lifestyle approach and create links with paper traditions and movements like Washi. By carving a niche based on rock paper’s unique properties (i.e. water-proof, glossy finish), the brand would reach stationery lovers who are not (yet) environmentally aware.
HabitSwapp and the Dutch Good Growth Fund
Unpack Impact’s second case study featured HabitSwapp, which makes apps like GreenSwapp to track food’s carbon footprint and nutritional value in order to help users make better choices, and Dutch Ministry of Economic Affairs’ Dutch Good Growth Fund, which facilitates development-related trade and investment in over 60 countries. HabitSwapp founder Ajay Varadharajan and Joost Staffhorst, Program Coordinator of the DGGF explored what it means for the public sector to finance an impact startup.
To develop GreenSwapp, Ajay and his team started from the 1.5 °C pathway and used science-based insights. In the European market the app focuses on the carbon footprint of food products customers can order and offers less carbon-intensive alternatives, such as oat milk instead of almond, soy or regular milk. But in India, where obesity and diabetes are important issues, the app focuses on health and nutrition while still recommending climate-friendly products.
ON GOOD COMMUNICATION AND CLEAR EXPECTATIONS
Ajay met Joost through fellow Impact Hub member, Kaline van Halder, co-founder of Meet Jack and former program manager at Crosswise Works. “Tell everyone about what you’re doing and ask for money. It’s about marketing: let people know that you exist and that you have a mission,” said Ajay.
A strong mission is essential for securing finance from the public sector. “The public sector and venture capital firms (VCs) have different goals: making a difference versus making a profit. While your business case is a factor, it’s important to have your priorities and strategy aligned with the institution’s efforts and where they want to put their money” Ajay added. As India is one of the markets the DGGF focuses on, it supported HabitSwapp with scaling their app there.
Joost explained the importance of clarifying the role the DGGF plays on behalf of the Dutch government: “We want to see entrepreneurs becoming successful, but we don’t come on board with an investor perspective. Our aim to facilitate the difficult startup phase through financial support. If entrepreneurs progress to a formal funding round, they need investors who know the market and can deliver tailored knowledge.”
What is essential to a collaboration with public sector, Joost argued, is an entrepreneur who spends time and energy on building the business: “There’s no scarcity of funds in the world but of entrepreneurs. When we hear out business plans, we also care about perseverance and overcoming obstacles. It takes stamina to continue. ” Which does not mean one should underestimate the power of a rigorous, long-term business strategy. “VCs have moved from business plans to pitch decks, but the DGGF wanted a detailed plan,” Ajay shared.
FEED-FORWARD FROM THE AUDIENCE
In the interactive component, the audience was presented with HabitSwapp’s challenge: Being an enterprise that bridges the tech-social-environmental space, what kinds of investors might be interested to get engaged and what are strategies for approaching them?
After small group conversations, the audience shared some insights that could be useful to HabitSwapp:
- In terms of securing additional funding, the enterprise has immense B2B potential. As users can shop low-impact groceries via the app, for example in the Netherlands, GreenSwapp could team up with online and/or sustainable supermarkets such as Picnic and Marqt.
- HabitSwapp is also ripe for collaboration with fintech companies and digital banks like Bunq; the app could be integrated in a bank’s service and analyse payments made with a credit card, for instance, to help examine spending habits and shift to more responsible food purchasing.
- Another approach for attracting finance and creating a cycle of wealth is crowdfunding from the app’s biggest beneficiaries – conscious consumers keen to lower their carbon footprints and (local) sustainable farmers who want to grow their revenues.
After this, Ajay shared a live demo of the newly released GreenSwapp.
The official program of Unpack Impact 2019 was closed and lively conversation and networking ensued over a borrel, catered by a fine assortment of Amsterdam’s food entrepreneurs: Willicroft plant-based cheese, Oma’s Soep, Vegan Bitterballen, Roze Bunker lemonades, Moyee Coffee, FRANK about tea and water from Made Blue.