The NVP (Dutch Association for Private Equity and Venture Capital) was founded in 1984 as a point of contact for investors who made use of a government scheme established in 1981, the Guarantee Scheme for Private Equity Firms (PPM-regeling in Dutch). This scheme was aimed at stimulating funds that provide private equity and venture capital to companies. By the mid-1970s, private equity or venture capital (until the turn of the century these two terms were partly interchangeable) came from the United States, and people wanted more of this kind of “entrepreneurial capital” in the Netherlands.
As early as the end of the 19th century there have been complaints that it would be too difficult for Dutch businesses to raise sufficient equity, especially for small and medium-sized businesses. Initiatives to address this issue have always had relatively little effect, whether they were a partnership of the major banks during the 1880s-1890s or government initiatives during the 1930s and after World War II. Banks, including the business and commercial banks that were more common at the time, made little or no effort to provide venture capital. The public market (the stock exchange) was also unable to provide sufficient equity. The Parellelmarkt, for smaller companies, was founded in 1985, but it failed to turn the tide, even though there was a great need for capital augmentation in the Dutch business community. Exceptions included the Nederlandse Participatiemaatschappij (NPM), which was founded in 1948, and the Regional Development Companies (ROMs) established by the government in the 1970s.
These successful initiatives from the post-war decades are still of great importance in the Dutch financing landscape.
The PPM scheme ensured that the number of private equity and venture capital firms and invested capital increased rapidly. For example, in 1991, 6 times more capital was made available for buyouts than in 1984, barely 7 years earlier. However, with a total amount of NLG 255 million in funding in 1991, this was still a modest form of funding for the business sector. But right from the start, there was a need for professionalization and sharing of knowledge. So in 1985, NVP started with specialised trainings, and then in 1989, a full NVP training program was established. In 1986, NVP published its first code of conduct. In the early 1990s, the general public also became more familiar with private equity. Large companies increasingly realised that it is better for a company to focus on what it is really good at, instead of bringing together as many different divisions as possible in order to weather cyclical fluctuations. The divisions of large companies that did not fit in (anymore) with core activities were divested and, in many cases, bought by private equity firms to be converted into independent specialist companies.
At the turn of the century, the emergence of the Internet and related business opportunities ensured that venture capitalists became a separate category of investors. Along with the growth of the sector, there was also a greater need for a professional industry body. That is why, in 2002, an external chairman and director were appointed for the first time. Until then, the chairman worked for a private equity or venture capital firm and the secretary of the board at VNO-NCW. During that period, the venture capital sector suffered a severe blow when the internet bubble burst in 2002-2003. Since then, Dutch venture capitalists have managed to recover well, partly thanks to targeted government policy. For several still active venture capitalists, this was the first economic cycle they successfully withstood. Today, the Netherlands is a European leader in investment and fundraising by venture capitalists.
Opening up to the outside world
The great financial crisis from 2007 onwards gave a new impulse to professionalization and responsible investment. From 2009, the discussion around the introduction of the “Alternative Investment Fund Managers Directive” (AIFMD) showed the need for effective advocacy in Brussels and The Hague for private equity and venture capital firms as never before. When the AIFMD was implemented in 2014, private equity firms came under direct government supervision for the first time. During this period, public interest in the sector also rose. In order to provide better and more detailed information about the industry to policymakers and regulators, the NVP started to collaborate more intensively with Invest Europe (then EVCA) for its market research. This ultimately led to the creation in 2016 of the European Data Cooperative (EDC), a pan-European data collection initiative. Since 2007, NVP has also been steadily expanding its training program. In 2012, NVP started the NVP Advanced trajectory - a training to become an NVP Certified Investment Professional.
Over the years the industry has come of age, which brings responsibilities. One of the responsibilities is to open up to the outside world and to communicate more with society and politicians. The industry has gone through great length to explain how the industry works, what it does, and how it contributes. These efforts have been accelerated by the new NVP Chair Annemarie Jorritsma, who took over as chair in 2015.