Building a world-class

Dutch start-up ecosystem

A strategy to maintain the high entrepreneurial momentum and facilitate the
ability for start-ups to scale can elevate the Netherlands to a global leader in
the world of entrepreneurship ecosystems.

by Tobias Henz, Laura Hofstee, Peter Jacobs, Mohcine Ouass, and Sven Smit

November 2022
2 Building a world-class Dutch start-up ecosystem
Contents

Introduction and key messages 4

Where the Dutch start-up ecosystem could be in 2030 7

Entrepreneurship in the Netherlands today 9

What entrepreneurship could deliver by 2030:

Capturing the full potential 12

Call to action: Potential actions for ecosystem players 20

Technical appendix 22

Authors and contacts 23

Building a world-class Dutch start-up ecosystem 3

 Introduction and key messages
The Dutch start-up ecosystem today
The Dutch start-up ecosystem is essential
for the Netherlands and makes a significant
contribution to the Dutch economy and society.
By providing jobs and innovation, improving
productivity, and paying taxes, Dutch start-ups
and scale-ups can support society’s ability to
deliver high levels of education, healthcare, and
social services.
The Netherlands has emerged as one of the key
ecosystems for innovation and entrepreneurship
in Europe and has proved itself to be highly
competitive in the start-up space. For instance,
with a thriving fintech sector, the Netherlands
has demonstrated global success in a uniquely
Dutch way (for example, through payments players
like Adyen and Mollie, or fintech solutions such
as BUX).
The Netherlands ranks fourth in terms of
start-up value creation in Europe, and among
cities, Amsterdam is one of Europe’s fastest-
growing start-up hubs.1 The Netherlands is also
doing well in another key metric of start-up
activity: the number of start-ups per capita.
In this regard, the Netherlands ranks fifth in
the European Union.2
Just as the number and pace of start-ups in
a country is important, so is the ability of those
start-ups to grow. According to this metric, there is
clear room for improvement as Dutch start-ups are
less successful at scaling than peers and perform
below the EU average in scaling to long-term,
stable companies. 3
Why we need to act now: The
importance of scaling start-ups more
successfully for the Netherlands
Why is it so important that Dutch start-ups
become more successful? It all comes down to
the importance of a strong entrepreneurial sector.
A robust start-up ecosystem that realizes its full
potential is a significant contributor to the national
economy, a pillar of a strong labor market, and
a key asset in the country’s (and the region’s)
ability to compete in the global marketplace.
We are currently facing the next wave of
global challenges, including food insecurity,
energy resilience, climate change, and health
access. The most effective solutions to these
global challenges need time to mature, but
the companies behind these solutions are likely
to be founded in the next years, if they have not
already been founded by today.
Europe and the Netherlands in general have
already lost out on creating global champions in
some of the key sectors that will shape our future.
Although Europe has many high-performing
companies, European companies in the aggregate
underperform relative to those in other major
regions: they are growing more slowly, creating
lower returns, and investing less in R&D than their
US counterparts. This largely reflects the fact that
Europe missed the boat on the last technology
revolution, lagging behind on value and growth in
information and communications technology (ICT)
and on other disruptive innovations. 4
Building new world champions in the Netherlands
will have a significant impact on the overall Dutch
economy. With sufficient scale, the start-ups
of today can become fundamental to an even
more successful Dutch society—creating jobs
and supporting the country’s ability to invest
in education, healthcare, and social-services
delivery. Looking beyond the Netherlands’
borders, a strong Dutch start-up ecosystem can
help build an even stronger European economy
that is more globally competitive.
In short, by facilitating the launches of innovative
start-ups and creating the conditions that allow
those start-ups to grow, the Netherlands could
help reposition itself globally in entrepreneurship
and contribute even more to Dutch society.

1
Erin Yurday, “Best countries in Europe for startups 2020,” NimbleFins, October 6, 2020.
2
State of European tech 2021, Atomico, 2021; Dealroom, 2021.
3
Based on McKinsey’s proprietary quantitative model; please refer to Appendix 1 for methodology.
4
“Securing Europe’s future beyond energy: Addressing its corporate and technology gap,” McKinsey, May 4, 2022.

4 Building a world-class Dutch start-up ecosystem

A forward-looking perspective on the
Dutch start-up ecosystem by 2030
Against this backdrop and based on the findings
and insights from a new research effort, this
report presents a forward-looking perspective
of what a start-up ecosystem in the Netherlands
could look like and how much it can contribute
to the Dutch society and economy, as well as
a potential blueprint for how to bring it about
(see sidebar, “About the research”). To this end,
the next four chapters offer the following:
— a vision on what a start-up ecosystem that has
become an integral part of the Netherlands
growth engine in 2030 could look like,
including its key pillars and principles
for success
— an overview of entrepreneurship in
the Netherlands today, including where
the Netherlands is performing well and where
the country can improve
— an analysis of the conditions that could help
enable the Dutch start-up ecosystem to
become an economic engine of the Dutch
economy with a potential value creation of
€250 to €400 billion from start-ups founded
until 2030
Building a world-class Dutch start-up ecosystem
— a framework for how players and stakeholders
in the ecosystem could come together to
realize the full potential of a Dutch start-up
ecosystem, including the creation of that value
and, in turn, a stronger labor market
About the research
Insights in this article were generated from
two main sources:
1. McKinsey proprietary quantitative
model. All figures presented in this
report are based on a quantitative
model developed to predict the impact
of the Dutch start-up ecosystem
by 2030.
2. Qualitative interviews. In addition
to the quantitative model, more
than 20 qualitative interviews were
conducted with key contributors to
the Dutch start-up ecosystem in May
2022 (such as founders, investors, and
other stakeholders).
For further details on the sources and
methodologies, see appendixes 1 and 2.
5
 Four core insights
This report contains four core insights about
the potential of the Dutch start-up ecosystem
by 2030 and how its players and stakeholders
may navigate the road toward that scenario:
1. The Dutch start-up ecosystem is
competitive and internationally relevant,
with a relatively high number of start-ups
(564 start-ups per one million inhabitants
were founded by 2021, on par with world
leaders such as Sweden, the United
Kingdom, and the United States 5). However,
the Netherlands has opportunities that
could improve and accelerate scaling of its
entrepreneurial activities in the near future.
2. Quantitative modeling shows that start-
ups founded between 2022 and 2030
could contribute an estimated €250 to
€400 billion market capitalization—30 to
45 percent of the market capitalization
of today’s AEX—as well as potentially
165,000–250,000 new jobs. Most of this
additional value would come from improving
the successful scaling of start-ups.
3. To capture this value,
the Netherlands must:
4. The ecosystem will benefit from
• Stabilize the current high entrepreneurial
activity and selectively further
increase the number of new start-ups
by increasing overall entrepreneurial
activity in specific demographic
groups and recognizing current
demographic disparities in both
founding and funding—for example,
a disproportionately small number of
start-ups are founded by women and
people with a nonacademic background,
and there are fewer female funders
and less funding for women-led start-
ups—and ensuring greater access
and more opportunities for these
5
State of European tech 2021, Atomico, 2021.
6 Building a world-class Dutch start-up ecosystem
underrepresented demographic groups.
Increasing entrepreneurship across
a diverse group of potential founders
could yield 35 to 45 percent more start-
ups founded per annum by 2030 or
350 to 450 start-ups founded annually
in 2030, on top of sustained start-
up activity.
• Most importantly, scale start-ups
more successfully by recognizing that
the most improvement potential for
the Dutch start-up ecosystem lies
in more successful scaling of start-
ups. Currently, the Netherlands loses
€100 billion to €250 billion of value due
to lower conversion rates throughout
the entrepreneurial funnel compared
to base case countries (such as
Germany) and stretch case countries
(such as the United States). To that
end, the Netherlands must ensure
that the conditions for scaling are met
(for example, competing on a large
enough scale, attracting top talent, and
availability of capital also in later stages).
an orchestrated effort from a wide range
of stakeholders—from educators and
legislators to venture capitalists and
founders—helping to establish such
a start-up landscape and to embed
internationally scalable entrepreneurship
in both the institutions and Dutch culture.
Together, these stakeholders could help
address barriers that are hindering start-
ups from scaling through incentives and
guidance on how to enable success.
This could help unlock new economic
potential—both in value and job creation—
in the Dutch start-up ecosystem by 2030
and beyond.
 Where the Dutch start-up
ecosystem could be in 2030
By 2030, the Dutch start-up ecosystem could be
even more fundamental to the Dutch economy and
Dutch society as a whole. While the Netherlands
seeks to further grow and strengthen its start-up
and entrepreneurship ecosystem, its path must
be tailored to its strengths and combined with
best practices and learnings from other countries.
Dutch entrepreneurship will build on the country’s
unique character and proudly demonstrate its
clear principles and characteristics.
The most integrated start-up ecosystem
in Europe
The Netherlands’ start-up ecosystem of 2030 is
highly integrated, yet it leverages unique strengths
of different stakeholders; founders, investors,
national and regional governments, angels,
mentors, universities, and accelerators work
together seamlessly in a mutually beneficial way,
leveraging the geographical proximity of regional
‘Regional hubs are without
a doubt a strength
and not a weakness.’
– Co-founder of a Dutch unicorn company
hubs, the directness and straightforwardness
of Dutch business, and the consensus-based
decision-making approach.
Furthermore, the Netherlands of 2030 has
established a truly Dutch “hub and spoke”
ecosystem that is deeply rooted in Europe with
Amsterdam as the major hub surrounded by
several smaller decentralized ecosystems as
6
New Palo Alto, Dealroom, June 14, 2022.
Building a world-class Dutch start-up ecosystem
spokes. These ecosystems are interconnected
but still have their own unique strengths and
capabilities, such as Eindhoven with a focus
on deep tech, and Groningen with a focus
on healthcare.
In Europe, a “global city” has been built that can
attract global talent and create global businesses.
Amsterdam is a key pinnacle in “the new Palo Alto,”
Europe’s tech ecosystem of successful start-ups,
venture capital, early adopters, and corporate
innovation. Centered on Amsterdam, London,
and Paris, the new Palo Alto also includes cities
such as Brainport, Bristol, Brussels, Cambridge,
Manchester, and Oxford.6
A global winner in energy, healthcare, fintech,
and food and agriculture
The Netherlands of 2030 is a global winner in
the transition of the same industries the country
traditionally led in: energy, healthcare, fintech,
and food and agriculture. Deep tech will
be a key enabler for these transitions, and
the concentrated deep-tech knowledge in
the Netherlands will create a flywheel effect for
innovation in other industries.
A world-class educational system driving spin-
offs
In 2030, Dutch universities have further built
on their excellent technical capabilities and
have curricula that are aligned with the needs
of sectors the Netherlands wants to win in.
Entrepreneurship at universities among both
students and professors is actively promoted and
supported by, for example, favorable technology
transfer office (TTO) policies, including lower
levels of equity shares demanded by Dutch TTOs
in line with countries such as Sweden, the United
Kingdom, and the United States. TTO policies are
harmonized among Dutch universities.
7
 An active and knowledgeable network of
domestic and European investors

The Dutch start-up ecosystem of 2030 has

increased levels of domestic capital on par with
European leaders such as Sweden. Capital
is provided by a diverse set of stakeholders
including, but not limited to, pension funds, early-
stage venture capital (VC), late-stage VC, and
regional-development funds. The increased share
of Dutch capital results in more economic benefits
landing in the Netherlands.

In addition to offering capital, Dutch investors also

have deep knowledge of the sectors they invest in
and internationally relevant networks. This allows
them to help grow the companies they invest in

‘If you ask an Israeli and have a positive impact on scaling.

A global mindset
entrepreneur what their Dutch entrepreneurs in 2030 will be known for
having bold growth ambitions, as well as being
home market is, they able to achieve these ambitions with the support
of solid business plans. Dutch start-ups have

answer that it is the USA. the ambition to go global from the start: “go big or
go home.”

This should become A society that celebrates scale-up success

In 2030, Dutch society roots for start-ups to
the Dutch mindset.’ succeed on a global scale, and the founders
leading these unicorns are visible role models
– Founder by understanding their pivotal role in society.
In addition, mentoring young entrepreneurs by
successful serial entrepreneurs is embedded in
the Dutch start-up ecosystem.

A magnet for start-up talent

The Netherlands of 2030 is a magnet for start-
up talent, leveraging the high level of education,
including world-class technical universities;
the highest level of English proficiency in
the world; an open, tolerant, and diverse
society; a high quality of living with Amsterdam
as the vibrant capital; and a world-class start-
up ecosystem.

With a vision of what the entrepreneurship

landscape in the Netherlands could be like in
2030, the next chapter describes the country’s
starting point.

8 Building a world-class Dutch start-up ecosystem

Entrepreneurship in the Netherlands today
The Dutch start-up
ecosystem is competitive and
internationally relevant
The Netherlands has become one of the key
ecosystems for entrepreneurship in Europe,
ranking fourth in terms of start-up value creation
in Europe, with Amsterdam a fast-growing hub.7
Furthermore, the Netherlands ranks fifth in
the European Union on total number of start-ups
per capita. 8
Looking at the labor market, homegrown start-ups
have created more than 130,000 local jobs across
all provinces.9
A focus on innovation has been key to Dutch
start-up success. The Netherlands ranks sixth
on the Global Innovation Index 2021.10 Behind
this ranking is an entrepreneurship ecosystem
that includes strong universities and a track
record of technology leadership and innovation.
The Netherlands has also demonstrated
a clear commitment to research. The country
is responsible for 2.1 percent of the world’s
research output with only 0.2 percent of
the world’s population.11
Success stories of the Dutch start-up ecosystem
include Adyen and Just Eat Takeaway, two out
of the top ten most valuable tech start-ups
founded between 2010 and 2020 in Europe, with
Adyen being the second most valuable in Europe
after Spotify.
The country’s start-up ecosystem is supported by
a business environment and culture that facilitate
its success. There is a culture of collaboration
in the Netherlands that is nonhierarchical.
The procedure to start a business is also rather
straightforward, with the average business being
able to effectively launch in about two days, where
its counterpart in other European countries or
the United States is likely to face a more arduous
process of “red tape.” Starting a business
and being self-employed are highly valued
in the Netherlands, and a low fear of failure12
partially explains why more start-ups take flight in
the Netherlands compared with other countries.
Finally, the Netherlands is home to a highly
educated, multilingual workforce with the highest
level of English proficiency in the world, excluding
English-speaking countries.13
While the Netherlands receives high marks when
it comes to certain metrics of start-up creation
(Exhibit 1), there is still room for improvement on
the number of start-ups founded. Evidence of
this is the fact that not all demographic groups
are responsible for a share of start-ups founded
on par with their share of the total population.
For example, only about 15 percent of start-ups
founded between 2010 and 2020 have at least
one female founder,14 while women represent
about 50 percent of the Dutch population.
Other demographic groups that are currently
underrepresented include founders with a non-
Western migration background, as well as
nonacademic founders.

7
“Best countries in Europe for startups 2020,” October 6, 2020.
8
State of European tech 2021, Atomico, 2021; Dealroom, 2021.
9
Netherlands startup employment 2021, Techleap.nl, CBRE, and Dealroom.co, October 2021.
10
Global Innovation Index, 2021.
11
“The promise of empowering deep tech,” TechLeap, 2021.
12
”Fear of failure rate,” World Bank, accessed May 2022.
13
“English Proficiency Index,” EF, 2021.
14
Dealroom, 2010–21.

Building a world-class Dutch start-up ecosystem 9

 Exhibit 1

The Dutch start-up ecosystem is performing in line with top performers on most
early-stage start-up indicators.

Start-ups per capita,¹ Total entrepreneurship activity (TEA),³

average number per 1 million inhabitants (2020 and 2021) % of TEA among adults aged 18–64 (2021)

Estonia 986 USA 15%

Israel 917² Netherlands 12%

USA 616² Israel 8%

Netherlands 564 UK 7%

Sweden 522 Sweden 6%

UK 511 Germany 4%

Germany 301

France 286

Start-up climate,⁴ Patent applications,⁵

1 = best, 30 = worst (2020) Number per 1,000 inhabitants (2020)

Germany 6.0 Sweden 2.5

UK 7.8 Germany 2.0

Netherlands 10.0 Netherlands 1.9

Sweden 12.8 Israel 1.8

Estonia 13.5 USA 1.5

France 18.8 France 1.0

UK 0.8

Estonia 0.2

1State of European tech 2021, Atomico, 2021.

2Dealroom, 2020–21.
3GEM 2020/2021 global report, Global Entrepreneurship Monitor, May 3, 2021.
4Erin Yurday, “Best countries in Europe for startups 2020,” NimbleFins, October 6, 2020, based on: Economic Health, Cost of doing business, Business climate,
Labor force quality.
5“PATENTSCOPE 2020,” WIPO, accessed May 2022.
Source: McKinsey analysis

10 Building a world-class Dutch start-up ecosystem

 The Netherlands has opportunities to
improve and significantly increase the
likelihood of successful scaling of start-
ups which will be crucial going forward
A key aspect of a thriving start-up ecosystem is
the ability of start-ups to scale successfully because
most of the economic value in the ecosystem is
created by large, mature scale-ups that have both
higher economic value and provide more jobs than
smaller start-ups. Furthermore, successful scale-
ups can have a positive impact on the flywheel
effect of the start-up ecosystem, where the success
of a company or sector leads to the founding and
eventual success of additional start-ups.
When it comes to scaling start-ups successfully,
the Netherlands has significant room for
improvement, as there are other leading countries
that are more competitive across several key
indicators of successful start-up scaling (Exhibit 2).
Scaling is by the most critical lever for the Dutch
start-up ecosystem, with the potential to double or
even triple the economic value created by start-ups.
Comparing macroeconomic indicators for successful
scaling of start-ups, the Netherlands scores
below leading countries. Market capitalization of
start-ups as a share of GDP is about 6 percent in
the Netherlands, 25 percent in Israel, 20 percent
in Estonia, 17 percent in the United States, and
15 percent in Sweden.14 The average start-up
valuation in the Netherlands is about €5.5 million,
€55 million in the United States, about €19 million in
Israel, and €14 million in Sweden.
Looking at funding available for start-ups to
scale, the Netherlands has further potential for
improvement. Although Dutch start-ups and
scale-ups received around €2.3 billion of VC
funding in 2021, VC investment per capita in
2021 in the Netherlands was only 60 percent of
the investment per capita in Sweden, and less than
50 percent the investment per capita in the United
States.15 Furthermore, only 22 percent of total
financing volume in the Netherlands is local funding,
versus 37 percent in Sweden and 78 percent in
the United States.
Additionally, the Dutch labor market is currently
unprecedentedly tight,16 and many start-ups
are struggling to find and retain the right talent.
This is underlined by 56 percent of tech jobs in
the Netherlands being hard to fill, compared to
40 percent in the United States and 44 percent
in Sweden.17

15
Dealroom, 2021.
16
Labor market figures from Statistics Netherlands (CBS), based on vacancies versus number of people looking for a job or unemployed.
17
State of European tech 2021.

Exhibit 2

The Dutch start-up ecosystem is currently underperforming on most of the scaling

criteria compared with peers.
Scale-up indicators, 2021
Worse than 20% of peer set average Within 20% of peer set average Better than 20% of peer set average
Not available

Sectors and scope Venture capital Capital People Regulation

Market Average Yearly venture Total financing Share of tech Employee

capitalization of start-up capital financing volume of jobs that are stock
start-ups as valuation volume per domestic hard to fill ownership
share of GDP capita investors plans score
Israel
Estonia
US
Sweden
UK
Germany
France
Netherlands

Source: Dealroom; Index Ventures; State of European tech 21, Atomico, Dec 9, 2021; McKinsey analysis

Building a world-class Dutch start-up ecosystem 11

 What entrepreneurship could deliver
by 2030: Capturing the full potential
For the start-up ecosystem to deliver next-level
change, the already high dynamic of the start-up
ecosystem needs to be accelerated. To unleash
the potential of the Dutch start-up ecosystem, we
look at two main thrusts: increasing the number of
start-ups founded until 2030 and making Dutch
start-ups more successful at scaling (in other words,
more likely to reach later stages of funding). Together,
these thrusts boost the ecosystem’s ability to create
significant value.
Today, approximately 1,000 start-ups are launched in
the Netherlands annually, ranking fifth in the European
Union (after Estonia, Ireland, Luxembourg, and
Denmark) and eighth across Europe.18 There is,
however, still some potential for start-up acceleration
by increasing start-up activity across demographic
groups that are currently underrepresented, as well
as boosting entrepreneurship in general. Through
applying different levers, the Netherlands could
increase the number of start-ups founded each year
by 35 to 45 percent, or 350 to 450 in absolute terms,
on top of sustained activity of 1,000 start-ups founded
annually. Its per-capita start-up number would grow
from a total of about 620 to a total of about 900 start-
ups per million residents by 2030. This increase would
place the Netherlands in the top three of start-ups
per capita in the European Union, behind Estonia
and Ireland.
When looking at scaling companies successfully, we
analyzed the percentage of companies that reach
different funding rounds across different countries
to determine the chances of success at scaling
a company. Currently, the Netherlands performs worse
at scaling than global leading countries, European
front-runners, and the European Union average,
leaving significant room for improvement (Exhibit 3).
The results of improved scaling are presented across
two scenarios. The base case is the more conservative
scenario, in which the Netherlands achieves a level
of success similar to that of a European front-
runner in scaling. The stretch case—the more
ambitious scenario—looks at potential outcomes if
the Netherlands were to follow the trajectory of global
leading countries, such as the United States. Value

18
State of European tech 2021; Dealroom, 2021.

Exhibit 3

The Dutch scale-up ecosystem is not achieving its potential, with conversion rates
lagging behind peers in all funnel stages.
Possible rounds of funding a start-up goes through
Long-term
Foundation Seed¹ Series A² Series B² Series C³ Series D³
stable

Average conversion rates

From foundation From seed to From series B to From series D to Total⁴
to seed series A and B series C and D long-term stable

Netherlands 0.15–0.19 0.08–0.10 0.05–0.06 0.65–0.80 0.04–0.09

EU 0.19–0.23 0.08–0.10 0.08–0.10 0.62–0.76 0.08–0.17

Germany
0.19–0.23 0.14–0.17 0.11–0.14 0.62–0.76 0.18–0.42
(base case)
US
0.30–0.36 0.16–0.20 0.14–0.17 0.59–0.72 0.40–0.88
(stretch case)

¹Seed rounds are among the first rounds of funding a company will receive. Round sizes range between $10,000 and $2 million, though larger seed rounds have
become more common in recent years.
²Series A and series B rounds are funding rounds for earlier-stage companies and range, on average, between $1 million and $30 million.
³Series C rounds and onward are for later-stage and more established companies. These rounds are usually > $10 million, and often much larger.
⁴Total conversion rate from foundation to long-term stable. Totals are determined by multiplying values across stages for the lower range and the upper range, and
then multiplying each by 100.
Source: McKinsey analysis

12 Building a world-class Dutch start-up ecosystem

 c eatio
a
d o c eatio
a e expressed in ranges,
where the low end of the range represents the base
case, and the high end of the range represents
the stretch case (Exhibit 4).
If both thrusts are pursued, start-ups founded
in the Netherlands between 2022 and 2030
could contribute an estimated €250 billion to
€400 billion market capitalization, up from about
€100 billion with current activity sustained. To
put this sum in perspective, it is equivalent to 30
to 45 percent of the about €850 billion market
capitalization of today’s AEX. The value created
can be deducted into four components:
A. about €100 billion from current activity
sustained between 2022 and 2030
B. about €20 billion from increasing the number of
start-ups founded between 2022 and 2030
C. €90 billion to €200 billion from better scaling
of the current level of start-ups
D. €40 billion to €80 billion from better scaling of
additional start-ups founded between 2022
and 2030 (in other words, better conversion for
additional start-ups)
In addition, these start-ups could generate
165,000 to 250,000 new jobs.
Given the already high start-up activity in
the Netherlands, about 90 percent of potential
value comes from making start-ups more
successful at scaling, and about 10 percent from
the increased number of start-ups founded
(Exhibit 4). Therefore, the greatest impact can be
achieved by addressing the scaling challenge that
the Dutch start-up ecosystem is currently facing.

Exhibit 4

Two main thrusts could have a significant impact on job and value creation.

Value creation, Jobs,

€ billions thousands
A. Current activity
100 90
sustained, 2022–30

Opportunity to unlock
B. Increase the
number of start-ups
20 20 ~10%
of the full potential
value by 2030¹

C. Scale start-ups
90–200 45–105
more successfully

D. Combined effect
from both levers
40–80 15–35
(better conversion for
additional start-ups) Opportunity to unlock

~90%
of the full potential
Increase the number of
value by 2030
start-ups and scale
250–400 165–250
them more successfully,
2022–30

1Based on €20 billion value from increasing the number of start-ups founded as a percent of the full potential value of €225 billion. The full potential value of
€225 billion is calculated as the total of A (€20 billion), B (on average €145 billion), and A plus B (on average €60 billion).
Source: McKinsey analysis

Building a world-class Dutch start-up ecosystem 13

 Priming the start-up pipeline
We have identified five levers that could contribute
to an a 35 to 45 percent increase in the number
of start-ups being founded by 2030, from about
1,000 in 2020 to 1,350–1,450 in 2030 (Exhibit 5).
1. Increase the share of founders with
a nonacademic background
While there is potential for universities to be
bigger launching pads for founders, investing in
the potential of entrepreneurial-minded people
without a university education is also important.
In our research, we identified three potential
actions that could help make a positive
contribution to increasing the number of founders
with nonacademic backgrounds:
— making entrepreneurship an essential part of
secondary education—for example, through
dedicated courses and competitions
— promoting structured mentoring programs
and networking events to enable access to
knowledge, experience, and capital
— running a public campaign to highlight success
stories of founders who studied applied
sciences or received vocational education
Increasing the share of nonacademic founders
by around 40 percent, from roughly 13 percent
currently to 18 percent by 2030, could lead to
an additional 35 to 55 start-ups in the Netherlands
founded per annum by 2030.19

19
Dealroom, 2019–20.

Exhibit 5

Five sources can contribute to a 35 to 45 percent increase in the number of new

start-ups by 2030.

Number of start-ups founded by 2030,

annually

65–100
55–85
50–75
115–170 +5–45%
350–
450 Additional
35–55 start-ups
~1,000

Current start-up
1,000
activity sustained

Baseline Nonacademic Female Founders with Founders Best-in-class Total

2021 founders¹ founders2 non-Western aged 25–544 universities5
migration
background3

1 2 3 4 5

Note: Figures may not sum, because of rounding. Sources were used as input data analysis.
1Annual report on European SMEs 2017/2018, European Commission, 2018.
2Dealroom 2019–20; KVK 2022.
3Global startup ecosystem report 2017, Startup Genome, April 17, 2017; CBS, 2021.
4"Thinking bigger: How ambitious is the Dutch entrepreneur?," TechLeap, 2021.
5University of Twente, Delft University, Oxford University, Hebrew University of Jerusalem.
Source: McKinsey analysis

14 Building a world-class Dutch start-up ecosystem

2. Increase the share of female founders
N w hstanding previous efforts to promote
women entrepreneurship, this report finds that
women still experience significantly more hurdles
in the Dutch culture to build and scale a business
as compared with men. When it comes to actually
starting a company, there is a significant gender
gap—only about 15 percent percent of start-ups
founded between 2010 and 2020 had at least
one female founder.20 The positive news is that
the gender gap has decreased over time, with
about 25 percent of start-ups founded since 2019
having at least one female founder.21
Even as gains are made toward gender parity in
founding, funding disparity is large and persistent.
Only 5.7 percent of the total amount invested in
the Dutch start-up ecosystem goes to start-ups
with at least one female founder. All-female-
founder startups get only 0.8 percent of total
start-up investment.22
Women report a higher fear of failure than men
and are substantially less confident in their ability
to start and run a business. Additionally, fast-
growing fields of innovation and technology have
a high male density, both in education and start-
ups.
Moreover, a large portion of the business angels in
Europe are men, and only 5.2 percent of women-
led start-up teams have received €1 million in
funding compared with 27.8 percent of those led
by men.23
— promoting more diversity at the venture capital
(VC) level to infuse greater diversity among
founder sets (for example, Fundright, a group
of Dutch VCs, aims to have a 35 percent female
management team by 2023)
This could lead to an additional 115 to 170 start-ups
in the Netherlands founded per year by 2030, our
analysis shows.
3. Double the share of non-Western
migrant founders
Residents with non-Western immigrant
backgrounds represent 14.5 percent of the total
Dutch population24 but only around 7 percent of
start-up founders.25
Furthermore, the share of total businesses started
per year by non-Western migrant founders
increased from about 12 percent in 2010 to
more than 20 percent in 2020, highlighting that
the willingness to be an entrepreneur among non-
Western migrant founders is there and increasing.
Four potential actions could help make a positive
contribution toward increasing the number
of start-ups founded by non-Western
migrant founders:
— promoting structured mentoring programs and
networking events to help enable access to
knowledge, experience, and capital
— increasing public awareness of background
bias in funding processes

Three potential actions could help make a positive — promoting more diversity among VCs to infuse
contribution toward closing this gender gap: greater diversity in founder sets

— promoting structured mentoring programs and — identifying talent pools by partnering with
networking events to help enable access to organizations with a track record of reaching
knowledge, experience, and capital migration background communities

— increasing public awareness of gender This could lead to an additional 50 to 75 start-ups

bias in funding processes to encourage in the Netherlands founded per annum by 2030,
more inclusion our analysis shows.

20
Dealroom, 2010–20.
21
Dealroom, 2019–21.
22
G ender diversity in the Netherlands: Startup & scaleup report October 2019, TechLeap, 2019.
23
Female founders monitor, Deutsche Startups, 2020.
24
CBS, 2022.
25
G lobal Startup Ecosystem Report 2017, Startup Genome, April 17, 2017.

Building a world-class Dutch start-up ecosystem 15

 4. Increase the share of experienced founders innovative new businesses, yet universities
L k ng 
mus tech pioneers could easily in the Netherlands generate fewer business
give the impression that founders need to be spin-offs than leading universities in the United
barely out of university to become successful. Kingdom and the United States, such as Oxford
But research has shown that the average age and Stanford, respectively.
of a successful start-up founder is 45.26 Today,
One impediment, for instance, is that universities
early-stage entrepreneurial activity27 is highest in
in the Netherlands often demand a 20 to
the age category of 18 to 24 and decreases with
30 percent equity stake in start-ups founded at
each successive age category. Sparking additional
their institutions—a higher share than in other
entrepreneurial activity among people aged 25
countries. In Sweden, for example, the maximum
to 54 could lead not only to additional start-ups
equity stake universities are allowed to take is
founded, but also to more successful start-ups
10 percent, and in the United States, the university
given the work experience that these individuals
equity stake is often in the 3 to 5 percent, or even
most likely will already have.
0 percent.
We identified two potential actions that could have
We identified three potential actions that could
a positive contribution:
have a positive contribution on increasing
— creating dedicated programs with the aim of the number of spin-offs:
increasing the share of entrepreneurs with
— encouraging an entrepreneurial mindset
professional experience—for example, through
among students and university staff
collaboration between private employers and
the public sector — supporting commercializing research and
technologies by establishing reasonable term
— increasing public awareness of success stories
sheets (for example, lower equity stakes for
of founders with diverse backgrounds and
universities as in the United States)
previous experience
— establishing entrepreneurship centers that
This could lead to an additional 55 to 85 start-ups
are close to and affiliated with universities
in the Netherlands founded per annum by 2030,
but that operate independently (for example,
our analysis shows.
UnternehmerTUM in Germany)
5. Increase the number of spin-offs coming out
Increasing the number of university spin-offs to
of Dutch universities and research institutions
the level of global leading universities by 2030
to the level of global leaders
could lead to an additional 65 to 100 start-ups in
Dutch universities are already home to
the Netherlands founded per annum by 2030, our
the research and innovation that leads to
analysis shows.

26
Pierre Azoulay et al., “Age and high-growth entrepreneurship,” National Bureau of Economic Research, April 2018.
27
Total early-stage entrepreneurial activity (TEA) rate is defined as the percentage of adults between 18 and 64 years of age who are either
actively trying to start a new business (nascent entrepreneurs), or who own and manage a business that is younger than 3.5 years (young-
business entrepreneurs).

16 Building a world-class Dutch start-up ecosystem

 Success factors for scaling achieve more successful scaling of Dutch start-
ups, the conditions for scaling a company in
Sr- s need to scale to unlock the full value
the Netherlands will need to improve.
potential for the Dutch start-up ecosystem by
2030, as the majority of value is created by scale- We identified six prerequisites to help
ups in later stages of maturity (about 70 percent the Netherlands resolve its scaling challenges
of the value creation happens after series C). To (Exhibit 6):

Exhibit 6

For a start-up to scale successfully, our analysis shows there are six criteria
to meet.

1. Select the 2. Compete on a large 3. Attract

right sector enough scope top talent

Focus on specific sectors that are
globally relevant and build upon
unique local strengths
Allow for a scalable business model
(eg, platform-based business)
Capture a large enough Enable easy access to domestic
addressable market that allows and international top talent
scaling
Adopt global-first mindset
instead of a local-first mindset

4. Orchestrate a broad support 5. Enable availability 6. Facilitate a supportive

ecosystem (eg venture capital [VC]) of capital start-up environment

Ensure a hy VC Enable availability of sufficient Create a favorable ecosystem for

seed-to-growth ratio domestic and foreign capital start-ups to win the race for talent
Enable expertise across sectors along the growth path and raise additional funding
and business models Tap into a broad source of capital through, eg, employee stock
(eg, pension funds and insurers) ownership plans and alternative-
Ensure domestic and taxation or fiscal policies
international funding

Source: McKinsey analysis

Building a world-class Dutch start-up ecosystem 17

 1. Focus on sectors that have b road demand
and are strong suits of the Netherlands
The Netherlands could focus on investing in
sectors that are attractive because of their
global demand and that draw on the country’s

‘Deep tech is the untapped unique expertise. Health and fintech are
internationally attractive. In the United States,

gold mine the Netherlands these sectors receive bigger shares of the total
pool of start-up funding than any other sector
(19 percent and 17 percent, respectively). These
is currently sitting on.’ sectors also received the highest investment in
the Netherlands (13 percent and 25 percent). In
– Serial entrepreneur
addition, a relatively high number of Dutch start-
ups are already active in these sectors.28 Other
sectors that the Netherlands could focus on
because of its know-how and high international
relevance are the energy and food sectors.

2. Adopt a global mindset from the outset

The Dutch start-up market is largely domestic in
focus, and scalability within the Netherlands is
‘A global mindset is limited. Our interviews with many Dutch founders
suggest that their growth aspirations are focused
required to build within the country’s borders. By focusing on
the global market from the outset, Dutch start-ups
scale-ups and unicorns.’ could open themselves up to a much larger market
with immense growth potential—and turn their
– CEO of a Dutch unicorn focus to internationally relevant issues. Therefore,
a global mindset could help remove the scaling
barrier imposed by the size of the Dutch
domestic market.

3. Attract top talent

The Netherlands is experiencing a historically
tight labor market, with job vacancies surpassing
the number of unemployed people in the labor
force for the first time in at least ten years.29
As a result, the Netherlands has a high share
of hard-to-fill job openings in the tech sector,
with 56 percent of the tech job openings in
the Netherlands considered hard to fill, compared
with 47 percent in Germany, 40 percent in
the United States, and 44 percent in Sweden. 30
Being able to attract talent is important during
the scaling phase because of the increasing
complexity and amount of work. Therefore, having
a sufficiently large talent pool, which could require
favorable international mobility conditions, will
enable start-ups to grow optimally by hiring
the right people at the right time.

28
Dealroom, 2021.
29
“Tension in the labor market,” CBS, 2022.
30
State of European tech 2021, Atomico, 2021.

18 Building a world-class Dutch start-up ecosystem

T e Netherlands ranks in the bottom quartile
compared with peers when looking at employee
stock ownership plans. 31 Capital availability can
be limited for start-ups, particularly at early
stages. To attract talent and compete with large
corporations, start-ups often use alternative-
compensation methods such as stock options
(for example, employee stock ownership plans
[ESOPs]). Therefore, the possibility to offer
attractive non-cash options is an important lever
for start-ups to attract talent to enable them
to scale.
4. Give start-ups sufficient guidance and
funding, especially in late stages
Financing volume per capita in the Netherlands is
below that of peers such as Sweden and Israel. 32
At the same time, the Netherlands historically
tends to build companies with a profit-over-growth
business model (“PE mindset”). Dutch VCs are less
present in later rounds and hence execute fewer
repeat investments. Additionally, the advisory role
and guidance that VCs provide to start-ups is a key
catalyst in their success. A solid and engaged
Dutch VC base could increase the scalability
success rate of the start-up ecosystem.
5. Provide additional investment from a variety
of investors
The availability of enough domestic and
foreign capital is an important catalyst for
entrepreneurship activities such as attracting
talent, conducting R&D and product development,
and marketing. These activities are particularly
important during the scaling phase of a start-
up. Attracting more capital from institutional
investors could increase the scalability success
rate. Pension assets as a percentage of GDP
are more than 210 percent in the Netherlands. 33
Dutch VCs raised €220 million from Dutch pension
funds between 2016 and the first half of 2021,
0.012 percent of total Dutch pension assets. 34
Twenty-two percent of total financing volume in
the Netherlands is domestic financing, while in
Sweden, for example, the share is 37 percent. 35
Having sufficient capital available will enable
start-ups to scale optimally and keep value
generation within Europe.
6. Facilitate a supportive start-up environment
Create a favorable ecosystem for start-ups
to thrive by winning the race for talent and
raising additional funding through, for example,
the 30 percent ruling and alternative-taxation
policies. In multiple other countries, including
France, Spain, and Sweden, additional tax
incentives exist around angel investment
tax deduction.
Although there is room to improve on each
of these six priorities to enable successful
scaling in the Netherlands, we recommend
focusing on improving the start-up ecosystem’s
ability to compete on a large enough scale,
orchestrating a supportive VC environment,
enabling the availability of capital, and facilitating
a supportive start-up ecosystem. These levers
have the largest impact potential and feasibility.
In short, if the Dutch start-up ecosystem were to
unlock the five levers for increasing the number
of start-ups founded, as well as ensuring
that the six priorities for successfully scaling
a start-up are addressed, start-ups founded in
the Netherlands between 2022 and 2030 could
potentially contribute an estimated €250 billion to
€400 billion market capitalization.

31
Index Ventures (note: Netherlands compared with Estonia, France, Germany, Israel, Sweden, the United Kingdom, and the United States),
2021.
32
Dealroom, 2021.
33
“The untapped potential of Dutch venture capital,” TechLeap, 2021.
34
Ibid.
35
Dealroom, 2021.

Building a world-class Dutch start-up ecosystem 19

 Call to action: Potential actions
for ecosystem players
To capture the economic and societal impact
described above, the Dutch start-up ecosystem
would benefit from the orchestrated efforts of
a wide range of stakeholders. Engaging everyone
from educators and legislators to VCs, founders,
and even CXOs can help embed internationally
scalable entrepreneurship in both the institutions
and the culture of the Netherlands. Together,
these stakeholders could help address barriers
that hinder start-ups’ ability to scale through
incentives and guidance on how to succeed.
A more diverse ecosystem
A more diverse set of stakeholders throughout
the Dutch start-up ecosystem could contribute to
more start-ups being founded as well as scaling
start-ups more successfully. A more diverse
ecosystem includes an increased representation
of, for example, founders with a migration
background, women, and nonacademics.
Ecosystem players that could benefit from more
diversity include founding teams, investors, start-
up accelerators, and public stakeholders.
Potential actions that could contribute to
increasing diversity include:
1. incorporating entrepreneurship courses
in the curricula of high schools, vocational
education, applied sciences, and universities
to create awareness and spark interest in
entrepreneurship from a young age
2. launching dedicated funds and grants focused
on underrepresented groups
3. partnering with organizations that have a track
record in reaching underrepresented groups
Additional late-stage domestic funding
Additional late-stage funding in the Dutch start-up
ecosystem could contribute to more successful
scaling of start-ups. Furthermore, a larger share of
domestic funding could contribute to more returns
flowing back into the Dutch economy, potentially
creating a flywheel effect that further benefits
36
CP P vestments, 2022.
37
Thirtieth actuarial report on the Canada Pension Plan, Office of the Superintendent of Financial Institutions, December 31, 2018.
20 Building a world-class Dutch start-up ecosystem
the Dutch start-up ecosystem. Sources for this
funding could include large institutional investors
such as pension funds and insurers.
An example of how Dutch pension funds could
invest additional VC funding comes from
the Canada Pension Plan Investment Board (“CPP
Investments”), created by an Act of Parliament in
1997 to invest and grow the Canada Pension Plan
Fund. 36 CPP Investments started with a fund of
funds approach to gain VC investment knowledge.
After a few years, they evaluated their portfolio
to determine their most successful partners and
started co-investing directly in start-ups. In 2022,
CPP Investments has more than CA $500 billion
(US $369 billion) in assets under management,
and the latest triennial report by the chief actuary
of Canada deemed the CPP sustainable over
a 75-year projection period (sustainability defined
as the confidence that the fund will continue to
contribute to Canadians’ retirement incomes
for future generations, even in the face of
economic fluctuations). 37
Potential actions that could contribute to
unlocking additional late-stage funding include:
1. aligning VC investment practices with
market leaders in the United Kingdom and
the United States with the aim of contributing,
among other things, to faster processes and
investments in asset classes that typically
take longer to commercialize (for example,
deep tech)
2. considering increasing the share of employees
at VCs and investment companies with
technical and specialist knowledge or with
a start-up background to improve alignment
of investment goals between start-ups
and investors
3. increasing the availability of capital—for
example, by stimulating pension funds to
invest in VCs as in the Canadian fund-of-
funds approach
Glob al mindset from the outset
A b  lset from the outset from founders
and founding teams could contribute to
the foundation of more scalable business models.
Although mindset shifts are difficult to bring
about through a set of actions, we provide some
suggestions that could have a positive contribution
to a more global mindset:
1. Emphasize the importance of a global
mindset in entrepreneurship courses at high
schools, vocational schools, and universities
by (for example) sharing success stories
from Dutch founders who went global. Also,
highlight the importance of a global mindset in
this success.
2. Put a scalable business model focused
on a large market on the agenda of start-
up accelerators.
3. Encourage VCs to provide mentoring and
an international network to start-ups that
are scaling. Furthermore, accelerators could
consider hosting events where role models
and successful entrepreneurs are connected
to new entrepreneurs through, for example,
roundtables. Topics could include how to
delegate or how to raise capital. One example
is ScaleNL Accelerator, a program for start-
ups that want to grow and scale in the United
States. The ScaleNL Accelerator will support
up to 60 companies that follow a 12-week
coaching program to prepare them for success
in the American market.
Favorable talent and business environment
For both founding and scaling start-ups, more and
better talent could have a positive impact.
Building a world-class Dutch start-up ecosystem
Potential actions could include:
1. ensuring fiscal policies are attractive for
international top talent. The Netherlands
currently taxes stock options via payroll
tax (at a higher rate compared with, for
example, capital gains tax in several other
countries), while countries such as the United
States, the United Kingdom, and Sweden
have structures that don’t tax stock options
as heavily
2. implementing additional tax incentives around
angel investment tax deductions, such as
the ones in multiple other countries, including
France, Spain and Sweden
Focus on sectors the Netherlands can win in
Focusing on specific sectors the Netherlands can
play a leading role in, such as energy, healthcare,
fintech, and food and agriculture, could lead to
more focus and a concentration of knowledge
leading to a flywheel effect contributing to
the scaling of start-ups. In terms of scientific
knowledge, the Netherlands currently has
a competitive edge in deep tech (for example,
ASML, NXP, and Philips) and agtech (though
there is an unmet need to commercialize this
research properly).
Potential action could include organization
roundtables with a variety of stakeholders to
validate the sectors where the Netherlands
can play a leading role and determine where
(geographically) different knowledge hubs
could arise.
This analysis shows it will take an orchestrated
effort of the full range of stakeholders—from
educators and legislators to VCs, founders, and
CXOs—to create a more prosperous and globally
competitive start-up ecosystem.
21
 Technical appendix
This appendix provides additional details about
the main sources of data and methodologies and
explains terms used in this paper.
About the research
To forecast the future development of the Dutch
start-up ecosystem, two main drivers were
considered: (1) an increase in the number of start-
ups founded and (2) more successful scaling of
start-ups.

The numbers presented in this report are based Input for the model is based on Crunchbase and
on a q uantitative model developed to predict Dealroom.co data sources:
the impact of the Dutch start-up ecosystem by
— Start-ups: the key characteristics and success
2030. In addition, we conducted more than 20
of more than 130,000 companies founded
qualitative interviews with key contributors
from 2010 to 2020 in Europe and the United
and decision makers in the start-up ecosystem
States, out of which approximately 77,900 are
in April and May 2022 to derive concrete
B2B start-ups and approximately 56,600 are
recommendations of how to achieve the goal
B2C start-ups.
of making the Dutch start-up ecosystem more
relevant and to shape the target perspective for — Start-up success: a random sample of
that ecosystem by 2030. approximately 150 companies with detailed
information on midsize exits, profitability, and
The advancement of a start-up can be measured
bankruptcies of start-ups that do not continue
as the stage of funding the start-up has received.
fundraising after a seed to Series D round.
With each funding round, both the market
capitalization and typically the size of a start-up — Funding rounds: the timing and valuations of
increase. Not all companies make it all the way more than 85,000 recorded funding rounds,
through the entrepreneurial funnel; some start- out of which approximately 70,000 specified
ups are either forced or decide to not develop the funding stage—for example, seed; Series
further. For the companies dropping out of A, B, C, D; and later stage.
the funnel, three possibilities remain: a company
In reality, the impact of the start-up ecosystem
can either cease operations altogether (for
is likely to exceed the modeled impact because
example, due to bankruptcy), become successful
a number of simplifications in the model were
and continue doing business without any
made that tend to underestimate the resulting
additional external funding, or be acquired.
impact: First, our model only measures value
The value of a company is, simplified, considered growth by funding rounds, but many companies
equal to the valuation of the last funding round. will still see a significant increase in value even
after the end of venture capital funding through,
The job impact considers all jobs created in any
for example, organic growth. Second, only start-
company, regardless of its fate. The reason is that
ups with external equity funding were considered.
even if a company is terminated, jobs were created
This left out a number of successful but
and former employees can move on to work at
bootstrapped or debt-financed start-ups.
another company—either bringing innovation to
corporations or joining another start-up within
the ecosystem.

22 Building a world-class Dutch start-up ecosystem

 Glossary of terms
Start-ups: !"#!-ups are young companies that
have already received one round of funding from
professional investors and that use innovative
technology or business models to satisfy
a previously unmet customer need; they generally
have high growth ambitions and are building (or
plan to build) a scalable product or service.
Scale-ups: Scale-ups are entrepreneurial
ventures that have achieved product-market fit
and face exponential growth. Scale-ups have been
through their first rounds of funding, reaching
seed stage or similar.
Unicorns: Unicorns are start-up companies with
an estimated market capitalization above €1 billion
before an exit or IPO.
Job: For the purposes of this report, a job is
a long-term paid position of regular employment.
We are explicitly excluding gigs and freelance or
contractor jobs from this definition.

Authors and contacts

Authors
Tobias Henz is an associate partner in McKinsey’s Munich office. Laura Hofstee is a consultant in the Amsterdam office,
where Peter Jacobs and Sven Smit are senior partners and Mohcine Ouass is a partner.

The authors wish to thank the organizations whose input has helped inform this report, including TechLeap. TechLeap
contributed to the report by providing access to key stakeholders in the start-up ecosystem and by sharing internal data,
research, and market perspectives.

Editorial team
The authors wish to thank Koen Heeringa, Daniel Okret, and Iris van Beek for their contributions to this report.

Media contact
Jeroen Gaudissabois: Jeroen_Gaudissabois@McKinsey.com

Building a world-class Dutch start-up ecosystem 23

M $K %&sey & Company
November 2022
Copyright © McKinsey & Company
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