Company Formations: Number of Dutch start-ups skyrockets

Up to 10 year ago friends and family in the Netherlands often looked wonderingly when you announced to become an entrepreneur. However, in recent years a growing number of employees have taken the step to become an entrepreneur. It is not only the employer that is driving this change to hire back the former employees as sole proprietors to save on labour expenses. The Netherlands has truly embraced entrepreneurship.

Entreneurship in the Netherlands has grown with double digits over the last years

Rapid growth of starting entrepreneurs in the Netherlands

A growing number of starters take the challenge to set up a business. Starters are encouraged by facilities and visas for the Netherlands granted by the government and made enthusiastic by initiatives of institutions such as the Dutch Chamber of Commerce. Even bolder are the entrepreneurs that kick-off a start-up. In fire rocketing numbers they try to come up with new and innovative services and products and to bring these to the global market. A start-up often requires substantial investments for product and market development. Many start-ups pursue to become a second Google. However, studies have shown that a start-up with a disruptive character requires a combination of, inter alia, vision, perseverance, self-awareness and discipline, which characteristics are only available to a small group of entrepreneurs.

The chances of start-ups

The number of start-ups is low in comparison to the number of starting entrepreneurs. According to figures from the trade register there are every year more than 100,000 new enterprises registered in the Netherlands, mainly sole proprietorships and limited liability companies. Among all new enterprises a few hundred start-ups are established. So, from all new starters only a fraction is a start-up. Of the group of start-ups only a limited part is a resounding success. Only a few dozen start-ups are really successful in the Netherlands. More than 70% is stopped prematurely.

Dutch unicorns

At the moment the Netherlands counts more than ten unicorns. These are the start-ups which are worth more than one billion dollars. Typical for start-ups is that it can happen that even at this stage no profit or only limited profit is made. Unicorns can be, despite their enormous size, quite unknown to the general public. The following companies belong to the select group of Dutch unicorns: Elastic, Interxion, Crucell, Booking.com, GitLab, Coolblue and AcertaPharma. Having this number of unicorns in such small country is considered to be an indication that the Dutch start-up scene does well in comparison to other countries.

The start-up scene is getting mature

It takes much effort, perseverance and capital to make a start-up a resounding success. In the benefit of the success rate, an industry has developed that actively supports the local start-ups. Accelerators or incubators stimulate start-up through education, coaching, sharing their network and giving access to capital and other needs. The accelerators increase the chances of survival of start-ups and enable to realise a faster growth. The Netherlands now shows a rapid growth in angel investors, mostly private investors which are as a group willing to fund start-ups in exchange for shares and subordinated loan.

Will you be the founder of the next start-up which develops into a unicorn?

Solely looking at the statistics setting up a successful start-up is almost a mission impossible. Creating an unicorn is like a miracle that changes the world a tiny bit. Successful entrepreneurs are often characterized by experience in their field and as serial entrepreneurs, founders of multiple businesses. Also, unicorns are marked by a rare combination of entrepreneurial talents and disruptive innovation.

Currently, the opportunities for starting entrepreneurs seem to be better than ever in the Netherlands. There is a lot of money flowing to start-ups as a result of low interest rates and the Netherlands has become a successful start-up hub. Do you have experience in your sector, an innovative idea and are you dreaming to become an entrepreneur? Then the time seems right for founding a start-up.

ABiLiTieS Trust | Corporate Services has an Amsterdam based team with extensive experience in Netherlands corporate support to start-ups, including virtual office. ABiLiTieS Trust is IR Global’s company formation specialist in the Netherlands.