Kim De Nolf | QustomDot

How unique is a three-headed management team? You already have one advantage: blocking is impossible.

Kim De Nolf: We are very team-oriented. You could say that this was already ingrained in the way we have interacted with one another since we worked together at university: in labs, but also during our doctorate and post-doctorate studies. We understand one another perfectly.

How exactly did the idea of the start-up come about?

Kim De Nolf: Laboratory research showed that ground-breaking work was being done, and then we hit upon the idea of applying for a patent application, which actually happened. At one point, when I asked my promoter if we could turn our idea into a start-up straight away, he thought it was too early. But only a few months later things had already changed and we applied to the Industrial Research Fund (IOF) for funding. That’s how we succeeded in speeding up the development of the technology, bit by bit. You could say that taking the step to the IOF was like a launching pad to us. Not only did we need to push boundaries in terms of technology; it was also important to write a real and credible business plan that provided answers to the question of how we would market this technology. On 27 January 2020, our start-up became a genuine business venture.

How unique is the technology?

Kim De Nolf: Pretty unique, I guess. The human eye can see a lot of colours, but technology cannot reproduce all of them. We’re pushing the boundaries in that area by projecting directly and stably on LED as well as other screens (such as smartphone screens or PC monitors), for example. Research is being carried out on this in other regions of the world as well, but we are one step ahead because the technology is already being applied here in highly concrete terms and is very customer-oriented.

What is the growth potential? Is the sky the limit?

Kim De Nolf: The growth potential is enormous; that’s a fact. So we need a big player (TV, smartphone) who can help us. In this case, we are thinking of a partnership with a multinational company. But everyone knows that it is a slow process. We also insist on retaining our independence.

A question of people and growth

 Do you agree that growth is the only thing venture capitalists take into consideration?

Kim De Nolf: I think that venture capital investors look at two things. Firstly: who are the people behind the venture? And secondly: what is the growth potential? We found that out from the first meeting. The Investment Committee asked us on several occasions for a more detailed report, so – and that makes sense – you have to prove yourself over and over again.

In the end, you were able to raise three million euros from three partners (Qbic II, PMV and Vigo Ventures). How difficult was this search for capital? Money is never a problem, they say.

Kim De Nolf: It took us a year and a half and we talked to various parties. That’s a very long time for us. Things started to gain momentum when the PMV (Participatiemaatschappij Vlaanderen) was in session for a day at Ghent Sint-Pieters station. Ghent University was also involved through Patrick Vankwikelberge. So, PMV was our first party. Contact with Qbic II was facilitated by Ghent University and more specifically through the Tech Transfer Offices service. Qbic II is our lead investor and also spent more time on us than any of the others. Contact with the Polish investment fund Vigo was established at a European Venture Forum in Munich. All in all, it took us about eighteen months to raise the capital.

Did you ever consider applying for a loan from a bank?

Kim De Nolf: Banks are not permitted to provide risk capital as such. We gained a lot of knowledge about how the venture capital market works through Start-it@KBC and acquired more insight through BRYO (the Flemish Network of Enterprises’ initiative for starters) and EY Novation. The same principle applies to every start-up: everything goes in learning phases.

Family, fools and friends would have been a possibility too?

Kim De Nolf: Only on paper. We couldn’t opt for this because we needed a lot of capital.

Strict agreements make reliable partners

What agreements apply between your VC partners and the management you represent?

Kim De Nolf: Seven parties hold seats on the board of directors: the representatives of the three venture capital companies, a representative of Ghent University, one independent director and Igor and myself as representatives of the management. The chairman is Sofie Baeten, who represents the lead investor (Qbic II). Decisions are principally taken on the basis of unanimity. We – being the management – submit our financial report every month. The intention of every board of directors is to brainstorm. This is great because you get to do this with people who are all much smarter. This is the only way to truly grow.

Isn’t a little realism necessary? In boards of directors like this everyone has their own agenda, vision and wish list, wouldn’t you say?

Kim De Nolf: In fact, it’s quite simple: everyone wants to get the highest returns possible; that’s what binds shareholders. As long as discussions lead to good results, I don’t see a lot of problems. But I’m also realistic when I say that we will run into differences of opinion at some point.

Do the Polish people at Vigo see things fundamentally differently?

Kim De Nolf: No, venture capitalists predominantly speak the same language and strive for the same goal. What I have already noted is that the people from Vigo also like to receive interim reports. You could say they want to be able to respond even faster.

How important is the informal board of directors? After a formal meeting do you ever meet informally to catch up?

Kim De Nolf: This is very important, and we do get together on a casual basis from time to time. I have a feeling everyone appreciates that.

How do you see the development of QustomDot in the long term? Would you like to continue with the current partners for as long as possible, and then float the company onto the stock market?

Kim De Nolf: An initial public offering? That’s something for the very long term. The question is always: how fast will the growth process be? You have different capital needs along the way. So at some point the current VC investors will make way for bigger guys from the circuit. That’s only normal. Based on our present capital we should be able to go on for at least another two years.

Striking: both the CEO and the chairman of the board of directors are ladies. Does that result in an unconventional approach, do you think?

Kim De Nolf: Yes, I can certainly concur with that. Women put emphasis on other things. To give just one example: the needs of the team always prevail over individual wishes.

(KC)