Investing in student startups: the Amsterdam Academic Angel Fund
What is 3xA?
The Amsterdam Academic Angel Fund, also known as 3xA, is a fund that aims to invest in very early-stage startups emerging from academia. Launched a year ago and coordinated by the Vrije Universiteit and the University of Amsterdam, 3xA has already invested in seven startups. The fund complements and works hand in hand with existing labs providing additional education or incubation, such as the Law Hub, ACE, and the D-lab. Ross Gordon, investment manager at 3xA, told us more during an interview.
“We invest in startups just before they create the minimum viable product or prototype. Whether it is a website or a prototype, the minimum version of their technology often costs money. The 3xA fund can fund the building of that prototype. If the startup already has the prototype but does not know if it has customers, the fund can help them do some customer discovery“, he explained.
What does the application process look like?
“The application process is relatively simple, with applicants submitting a standard startup business plan that explains the team composition, the problem they are trying to solve, their solution, their business strategy and how they plan on using the money”, Ross said. A pool of 17 judges, split equally between UVA and VU, reviews each application. They are representatives and experts from several faculties to ensure that the process is inclusive. Every application is sent to all judges, and once at least five judges have reviewed it, a decision is made depending on the project’s score. If the application scores high enough, the startup is automatically awarded the funding.
The 3xA’s three main value propositions are the diversity of judges, the ease of application and the speed of the process. The projects are reviewed by experts from different fields: this ensures that applications are evaluated from different perspectives. Secondly, the application process is very simple compared to other investment companies in Amsterdam that require extensive financial information and project plans, which are unrealistic for student startups at this stage. Lastly, the fund aims to provide funds to student startups within two weeks, when most investment companies in Amsterdam can take up to several months to provide funding.
For which entrepreneurs and startups?
The Amsterdam Academic Angel Fund invests in any student idea that is commercially viable and has the potential to realistically pay back the loan in 3 to 4 years. To apply for funding, a startup must have at least one member from either UVA or VU and not have raised more than €100,000 before. “3xA aims to lower the barriers to entry for entrepreneurs, especially those who do not come from wealthy backgrounds. It provides relatively cheap funding, allowing entrepreneurs to run their businesses for three to six months, hopefully reaching their next value inflexion point.”, explained Ross.
Startups funded by 3xA so far
The Amsterdam Academic Angel Fund has a diverse portfolio of student startups that span across various fields, missions, and target markets. Here are 3 examples of startups funded by 3xA in 2022:
Wegozero is a mapping service that locates zero-waste businesses and services across multiple European cities, from waste-free product stores to zero-waste apartment rents, empowering its community to consume and travel more sustainably.
Hotelshousing is a B2B platform that offers extended stay solutions for companies in Amsterdam by partnering with hotels.
Binqy is a science-based software designed to monitor the well-being of working professionals, providing insights to prevent burnout and promote healthier lifestyles.
The diversity of 3xA's portfolio is a testament to its commitment to supporting innovative and impactful startups.
Plans for the future
The team’s focus for the future is to build its network and improve its communication. The infrastructure is already set up, and the fund is looking for more startups to invest in. 3xA hopes to receive 10 applications this year!