Meet Herman, one of Newion's two new partners
An interview with Herman Kienhuis
1. Tell us more about yourself. Where are you from? And what is your background?
I grew up in Twente, studied Chemical Engineering in Groningen and spent five years as a strategy consultant for McKinsey & Company in Amsterdam, London and Antwerp and one year in France doing an MBA at INSEAD.
In 2004, I joined Finnish media group Sanoma, first as Strategy Director for its Dutch operations, and after that as Director Product Development and part of the management team at ILSE Media (later Sanoma Digital), the leading Dutch consumer internet company. In 2012, I initiated and led a new corporate venture fund (SanomaVentures) and created a portfolio of 23 seed-stage internet companies in the Netherlands and Finland.
In 2016, I founded an angel investment syndicate (River Venture Partners), investing in 12 seed-stage software companies and I led KPN Ventures for four years, investing in 16 technology companies and 8 venture capital funds as a limited partner.
2. How did you become a venture capital investor? And why do you choose to focus on B2B SaaS? Having spent five years developing and launching new internet concepts at Sanoma Digital, I saw great potential in start-ups that were building digital businesses at lower cost and higher speed and with greater flexibility than we could as a large corporation. I also thought the role as investor was a good way to leverage my experience in strategy, finance, product development, marketing and recruitment. So I developed a proposal for a startup investment fund and raised funding from the Sanoma Group in Finland.
After working in both the consumer internet and the B2B software market, I concluded that the latter is now the better investment opportunity. B2B companies have a significantly lower risk profile. There is more opportunity to specialise and differentiate and more scope for investors to add value with their specific expertise and network and there is still a huge potential for growth with many businesses moving to cloud only now. Also, my B2C experience in product development, UX and digital marketing is actually becoming more relevant for B2B software as well.
3. What led you to join Newion?
This step towards an independent venture capital firm is a great new challenge. It brings a more entrepreneurial environment and an opportunity to help build the VC firm as a co-owner, while developing myself as investor and boardmember within an experienced team. I knew Newion from our interactions in the Dutch tech investment scene. When they approached me and I got to know the team, everything fell into place! It’s very exciting to work with this group of people, building one of the leading tech investment firms in Europe!
4. What will you focus on at Newion? I’ll be sourcing new deals in Benelux and Finland. I will also provide support for portfolio management, contributing with strategy, product and marketing expertise and my network in the telecom, media and technology sectors. I am also optimizing our own tech stack, such as our CRM system and setting up a new VC internship programme.
5. How do you compare corporate VC with independent VC firms? And what advice would you give startups? I always advise founders to choose investors wisely based on their value-add, and possibly select more than one. Independent investors have broad experience of supporting high-growth companies, an extensive network and strategic and financial skills. And they are generally fully aligned with the founders in seeking to achieve a successful exit in 5 to 8 years.
Corporate investors can bring very relevant industry expertise and access to customers, especially when scaling-up. However, corporate leadership and strategy are prone to change and may diverge from the founders’ goals, which should be taken into account. I generally advise start-ups to select an independent investor as lead-investor and a corporate investor as potential co-investor, bringing additional value as strategic partner, but limiting their control rights and the startup’s dependency on them.
6. What kind of companies or technologies are you currently most interested in? I am intrigued by the AI technologies that have emerged from the growth in sensors, data collection, data processing and machine learning. I anticipate tremendous development in this area and think it will deliver great benefits for individuals and businesses and exciting opportunities for new companies and their investors, if we ensure that potential risks and downsides of these new technologies are avoided or mitigated.
7. What kind of support do you offer your portfolio companies after investing in them? As an advisor, I support founders and their management teams by offering insights drawn from our experience in growing companies from thought leadership to product leadership to market leadership. I also provide introductions to prospective customers, partners, employees and follow-on investors and assist with interviews and negotiations if needed. As a sparring partner, I challenge the management team by offering new perspectives and catalysing new thinking about company strategy. And as a coach, I support founders in their personal development by helping them reflect on their own behaviour and drivers.
8. What advice would you give a startup founder seeking investment from Newion? What will make them stand out?
Do your homework! Research investors and reach out to those that are a good fit with your business and growth stage. Explain why you think Newion would be a good partner. Investors want proof. They also want to be inspired. So present your key customer and growth metrics and show your passion, vision and ambition! The primary goal of a first meeting, ideally in person or otherwise by video, should be to tell your story, build a personal connection and learn from the investor’s feedback.