LBAN membership: Connecting start-ups and business angels

In December 2020, Luxinnovation joined the Luxembourg Business Angels Network (LBAN) as one of its first corporate members. The agency’s objective is to facilitate contacts between promising start-ups and business angels looking to invest in new and disruptive innovations.

One of the biggest challenges for tech start-ups is to find seed and pre-seed capital that can help them grow. Business angels – independent individuals who provide capital for the development of businesses – can play a key role in their development. As many angel investors have a background as entrepreneurs and company executives, they often also contribute with their own experience, skills and contacts.

LBAN brings together a community of business angels in Luxembourg with the aim of helping them become better investors and improve their investment decisions. As supporting innovative start-ups is part of Luxinnovation’s core mission, the synergies between the two organisations are obvious.

Luxembourg’s start-up ecosystem is central to our efforts to foster a sustainable digital economy.

“Luxembourg’s start-up ecosystem is central to our efforts to foster a sustainable digital economy, where companies need the most innovative technologies to ensure they are at the forefront in an increasingly competitive and innovative global economy,” says Sasha Baillie, CEO of Luxinnovation. “Facilitating start-ups’ access to funding is crucial if we want to help them succeed. LBAN has a key role to play here, and by joining the association as corporate member, we confirm that we want our relationship to be lasting and mutually beneficial.”

Fit 4 Start: interesting target group

Interaction between LBAN and Luxinnovation is nothing new. “We have already been cooperating over the past few years, in particular in the context of the Fit 4 Start acceleration programme where several LBAN members have been part of the juries that select and support participating start-ups,” says Stefan Berend, Head of Start-up Acceleration at Luxinnovation. “Recently, we also organised an opportunity for Fit 4 Start participants to pitch in front of LBAN investors. With our membership, we aim to match start-ups looking for capital with investors in an even more efficient manner.”

I believe that having gone through such a reliable acceleration programme increases start-ups’ chances of raising funds.

Fit 4 Start graduates are indeed an interesting target group for angel investors. The selection process for the programme is highly competitive, which already says something about the potential of the successful candidates, and one programme objective is to help participants become investor-ready. “We help the start-ups validate a lot of assumptions that are critical for the future success of technology start-ups,” explains Mr Berend. “We ask them the same questions as investors do, so by the time they meet business angels they already have the answers. This ideally shortens the due diligence stage of the investment process. I believe that having gone through such a reliable acceleration programme increases start-ups’ chances of raising funds.”

Leveraging start-up capital

However, the range of start-ups that Luxinnovation can introduce to angel investors goes far beyond the Fit 4 Start alumni. The collaboration with LBAN also gives the Luxinnovation team an excellent access to angel investors and opportunities to learn more from that community. “It is a win-win situation,” confirms Mr Berend. “LBAN is also part of a European network, and can help us facilitate contacts with investors in other EU countries.”

A joint initiative to take place shortly is a “Lunch & Learn” event organised on 23 March 2021 under the heading “Young Innovative Enterprise – How to leverage your [Start-up’s] next investment round (without dilution)”. “The Young Innovative Enterprise grants awarded by the Ministry of the Economy leverage funds from investors without taking any participation in the start-up capital, which means that the investments are not diluted. While it is the start-ups that receive the subsidy, this means that investors indirectly benefit from it as well,” says Mr Berend. “By providing further information about this aid scheme at the event, we hope to facilitate further the cooperation between start-ups and business angels.”

LBAN organises the webinar “How to leverage your next investment round” on 23 March 2021 at 12:00. Stefan Berend from Luxinnovation will speak about how the Young Innovative Enterprise grants, awarded by the Ministry of the Economy, leverage funds from investors without taking any participation in the start-up capital. Registration is open.