Intro:
Welcome to this episode of Let’s Talk About Work! Today, Bart Wuyts has a conversation with Frederik Matthijs, the director of Trividend. Tune in to discover what ‘impact investing’ means, how it’s used as a tool to create a more inclusive society, the challenges faced by investment committees, and how engaged advisory boards can make a difference in closing gender and other gaps.
Dear listeners, we warmly welcome you back to another episode of our podcast, Let’s Talk About Work. Today, we find ourselves in a rather special location—a cosy room at Kunnig, a social enterprise in Antwerp. I have a clear view of the textile department, where many people are working away at sewing machines, creating beautiful things. Our guest today is Frederik Matthijs, the director of Trividend, and he will soon explain what Trividend is all about. We are delighted that Frederik has travelled all the way from Ghent to join us for this conversation. I’m very curious to hear what you have to say on the topic that concerns us today. Frederik, a warm welcome, and perhaps it’s best if you start by introducing yourself, explaining what you do, and maybe even why you do what you do.
First and foremost, thank you for inviting me to this fascinating podcast series. It’s truly an honour for me.
I live in Ghent and am the father of a 15-year-old daughter. I was trained as an economist, but fairly soon after my studies—initially working in a commercial environment—I realised that I wanted to take a different approach. I wanted to make a meaningful contribution to society. The trigger for this shift happened when I was living in the Rabot district and began tutoring a young Turkish child in homework. This was with a small local organisation, and it was then that I saw and felt the difference you can make for that child, but also for the family as a whole. It also made a difference to me—realising that by offering support, you can genuinely help someone move forward. This experience quickly changed my mindset, making it clear to me that I wanted to use my background, knowledge, and network to contribute to solving societal challenges. Shortly after, I helped establish several organisations, including Uilenspel in Ghent, which has since grown to over 600 volunteers who provide weekly home tutoring for children.
Uilenspel?
Yes, it’s now also active in Antwerp. It started in Ghent and then expanded. In that organisation, I always chose to work as a volunteer, mainly behind the scenes. For the first ten years, this involved an 8-hour weekly commitment. This has since decreased as the organisation has become more professional. But I am still the chairman, and that’s the role where I can best support such an organisation—leveraging my background as an economist in financing, bringing in my network to help the organisation grow.
I’ve co-founded a few other organisations as well, mainly in my spare time. The common thread throughout my career has been the financing of social entrepreneurs and organisations. For the past two and a half years, I’ve been doing this as the director of Trividend. So, as requested, a brief explanation of Trividend…
We are an impact investment fund, essentially a public-private partnership. Our shareholders include a mix of the government, social organisations, trade unions, a number of social enterprises, the King Baudouin Foundation, and some more traditional banking institutions and insurance companies.
With this capital, we can provide risk capital to start-ups, entrepreneurs, and scale-ups—in the relatively early stages of their existence or in a new phase where there are still certain uncertainties (Will it work? Will it not work?). That’s our role: to provide capital.
We do this starting from relatively small amounts—from €50,000. This is a gap in the market. Other investment funds usually start at €250,000 or even €500,000. Lower amounts are not profitable, and it is thanks to the support of the Flemish government that we can do this. They are not only our largest shareholder but also provide an annual subsidy that allows us to offer these smaller amounts.
And these smaller amounts, may I call them "seed capital" in the venture capital world, or is it a bit further along?
Our standpoint is quite clear: from the moment you have your first paying customer, you can come to us. So, we don’t invest in research and development. There are other avenues for that, like VLAIO, but as soon as that first customer is there, a typical use of our capital might be for your first hire of a salesperson, marketing budget, and so forth.
And do you provide this capital in the form of loans or participations?
Both. They are subordinated loans. This means that if things go wrong, the bank gets its money back first, and then Trividend. We also don’t require collateral, so for the bank, it acts as a lever to create additional financing.
Our intention is to invest for 5 to 7 years and then exit. This means that the loans are repaid. We are there to support the initial growth, and then it’s up to the next investor to provide additional or other capital.
And all the initiatives you finance must somehow demonstrate that they aim to have a relevant social impact?
Exactly. We focus on three pillars. Historically, and at the inception of Trividend—founded in 2001—the aim was to channel all capital towards entrepreneurs who create additional jobs in the social economy. For example, social enterprises like the one we are in today.
This has since expanded. The second pillar is circular solutions—entrepreneurs who use little or no raw materials, and if they do, there’s no waste.
What we see is that many start-ups with circular solutions spontaneously seek collaboration with social enterprises. For us, that’s a match made in heaven. It covers both the ecological aspect and inclusion, namely employment on the shop floor.
The third pillar is social innovation—a broader interpretation of social impact. An entrepreneur who, for instance, has a solution to reduce poverty or bridge the digital divide. This can be quite broad, which means that our portfolio today, consisting of about 45 companies, is very diverse. It can range from a production environment like a social enterprise to a SaaS (Software as a Service) solution where a service is offered, or it could even be an app.
We are generalists, but the common thread is impact.
And how important is the theme of inclusion within this framework? Inclusion is somewhat of a recurring theme throughout our podcast series. How significant is this topic for you?
At its inception, it was 100% about inclusion in terms of social employment. I’m not sure whether we still need to make the distinction between inclusive and social employment...
Probably not; that’s a thing of the past.
Indeed, I don’t think so either. Initially, it was entirely about that. Today, we have an agreement with our shareholders that two-thirds of our investments must contribute to social employment. This can be done directly by financing a social enterprise or indirectly by, for example, financing a circular start-up that enters into a structural collaboration with a social enterprise. And that’s going very well. Today, more than 70% of our outstanding capital creates jobs either directly or indirectly in the social economy.
But the third pillar—social innovation—can also be about inclusion.
It can be about inclusion?
Yes, it can indeed be about inclusion, and that’s the case with many of the companies in which we’ve invested. So, it’s definitely a crucial element in our investment strategy.
Because I hear you mentioning ‘social enterprises’ and ‘social employment’ as important criteria, but inclusion is much broader than what happens within the social enterprise sector in Flanders, isn’t it? And that’s reflected in that third pillar, if I understand you correctly?
Yes, that’s right. Perhaps it’s also useful to put this within the broader context of impact investors. Because then you see that inclusion is not an easy one. When you talk about the societal challenges that exist—and you can categorise them under the ESG (Environmental, Social, Governance) framework… The ‘S’ is already more aligned with inclusion, and governance as well: the policy, the way you bring your products or services to market, your HR policy...
And perhaps it’s worth noting: recently, a new institution called Impact Finance Belgium was established. Their aim is to channel more capital towards impact investing by inspiring and bringing people together. This involves larger sums of money, involving traditional banks, investment funds, pension funds, insurance companies, and so on. At Trividend, we are very pleased that such an initiative has emerged. We are also a member of an advisory board and committee, which gives us the privilege of sitting with directors from these large banks and institutions. And when we talk about impact investing, I must say that, despite the good intentions—sometimes driven by pressure from Europe—there is a lot of interest and drive towards this, but when it comes to ESG, we usually end up focusing on the ‘E’ in the end. The ‘S’ and ‘G’, where inclusion is located, are often more challenging. Because ‘E’—environment, ecology—often involves products or projects with a clear business model—think solar panels, to put it simply—which can generate financial returns alongside social returns. That’s something familiar, something everyone immediately understands.
But the story of inclusion is, of course, harder to pinpoint in terms of directly showing how it contributes to the profitability of an entrepreneur if you focus on inclusion. And as I said, it’s much broader than just employment. It can also be a product or service—think, for example, of social housing—and there, by definition, profitability is a bit lower.
And how important is profitability for you? And for impact investors in general?
For impact investors, you start with your analysis: is this genuinely a product or service that will contribute to solving a societal challenge? That’s your starting point. If that’s not the case, we’re not interested and won’t go any further. Of course, the financial aspect is also important. But the question is: are you willing to make a trade-off?
To continue with the example of social housing: if you can clearly demonstrate that this societal need—a home for everyone—is being met, but you have to sacrifice a bit of financial return, then we notice that this becomes a much more challenging discussion.
For Trividend itself, when it comes to social employment, we can also lower the expected return (interest) slightly because we can rely on an external fund managed by PMV, where we have drawdown rights and where we can also cover part of our risk.
The trade-off today: you have to consider the context today. And one of the goals that we have set is exactly to delve deeper into the trade-off between impact and financial return. Can we integrate that more into our decision-making structures?
Because you want to mitigate your risk. Can you say something about whether, after more than 20 years of Trividend’s existence, you’ve noticed that the projects or companies you finance carry a higher risk than what a traditional bank finances? Risk in terms of non-payments, defaults on loans, or participations that have to be written off… Is that significantly higher for you because you choose impact investments compared to a traditional investor?
Compared to the bank… You have to look at the phase in which you’re investing. The bank won’t invest in the phase where we invest.
Compared to other investors, I think it’s a double-edged sword: the ambition of a start-up or entrepreneur is to solve a societal problem, and the focus is also somewhat there, while as an entrepreneur, you have to juggle many plates to make it work. So, besides your classic reasoning for realising your business model and financial plan, you also want to maintain that focus on the impact story. So, it’s a more complex narrative to realise.
However, the good news is that it usually goes hand in hand. And it’s essential to look at where you measure your impact’s success. How do you do that? What indicators do you set to achieve that?
In the early stages of a company, it should focus as much as possible on things that also contribute to their profitability. But, for example, if you say ‘I want a mindshift’—there are several projects that say ‘I no longer want beverages to be transported according to the classic models on the road, but directly from the tap’—these are new models, but you also need a mindshift for that. If you then think about what percentage of people will start drinking directly from the tap (with or without additives), it’s a long-term story. In the short term, you have to look at where profitability lies.
So it can be more complex to achieve that. I also think of certain sectors… For example, if you’re producing circular products: you impose a set of criteria that, today, usually aren’t cheaper. And your raw materials or design for your product may also be a bit more complex or more expensive than if you say you’ll outsource production to low-wage countries, or if you produce it locally in a social enterprise that also considers an inclusive workforce. There are some trade-offs that sometimes make it more challenging to achieve profitability.
So that means you have to dare to have a longer-term vision as an investor, so that profitability might take longer to realise than with more traditional investments.
Over Trividend’s history, our failure rate is 1 in 6, which isn’t bad for an investment fund. So, I think, depending on the model and how you approach it, in the long term, it doesn’t necessarily have to involve more risk.
I want to jump back to the theme of inclusion. We briefly touched on the fact that many of the projects and companies you finance must have a link to social enterprises or work on inclusion through social innovation. Now, I can imagine that from a different perspective, there are many entrepreneurs today who, let’s say, come from a different ethnic background or are part of a minority group today, who find it more challenging to access start-up or growth capital. How do you view that? How important is that to you?
That’s something that has gained more attention at Trividend in the past 2 to 3 years. Let’s say that there was less focus on it in the past. The principle we adhere to is that you can’t propose the right solution for specific societal problems if you don’t know them yourself, if you haven’t experienced them yourself. So, if we say we are fundamentally here to solve those problems, but we only invest in white men who look like me—middle-aged men—then you simply can’t imagine: what solution is actually suitable for a particular target group? So, it’s crucial to have a good mix of diverse entrepreneurs in your portfolio if you aim to solve these issues.
But that’s very broad, I think. Today, there’s a lot of talk about female entrepreneurship—less than 10% of start-ups are led by a female founder. Also, when it comes to seeking capital today: what you see is that we usually have the luck to rely on a network of friends, parents, or family to provide that initial seed capital. Investors say, ‘you need to show skin in the game,’ ‘you need to invest yourself, and then we’ll join in’… But some people simply don’t have those resources. So, you’re also dealing with a bit of a vicious cycle. I must admit that we find it’s not so easy to connect with, for example, more female entrepreneurs or to have a more diverse portfolio.
Now, if I may interrupt you, as a director, you’re not the one who ultimately decides, ‘we’re going to make this investment or not’. You have an investment committee, as it’s called, composed of knowledgeable people who can form an objective opinion about ‘does this fit within our goals?’, ‘is this the risk we want to take?’. And the composition of such an investment committee can potentially help to bring a theme like inclusion more to the forefront or make it more active in the portfolio. How do you and how does the investment committee view that today at Trividend?
We’ve also moved towards a more diverse composition within the investment committee. Typically, if you look at investment committees in general...
Grey-haired white men.
Exactly, and if you’re lucky, maybe one in ten is a woman.
We have gender balance, but in terms of diversity, it’s not yet equal. We’re still working on that. And it comes down to the same thing: as a white man, you might not be able to imagine a particular solution. If it’s about a specific need of a woman or… We can’t really judge whether it willwork or not, because you have no personal connection to it. So, that’s absolutely something we need to focus on, and we’re working on it. It’s not just in the investment committee where this needs attention. The initial screening is done by colleagues. When I started, we were 100% white men in the Trividend team; now, their share is 60%. And at the moment when we had the opportunity to hire two new people, we specifically decided to hire a man at that time.
So, we’ve made some progress there.
At the board level, however, it’s still quite wrong. We have to be honest about that. And we’ll need to work on that as well.
Uh oh, I hope the board members aren’t listening to this, that they’re doing everything wrong…
I mean in terms of diversity and gender balance—they certainly have the necessary capabilities. But it’s on the agenda for the autumn. There’s progress, and the most important thing is that we include this in our own impact report. When we look at what we do as a fund, when we aggregate across our various companies, what impact do we see: CO2, employment, and so on, but also, as a fund, we now have a target for diversity in the portfolio. So, we’re going to start measuring that from now on. And that’s where it all begins. Fortunately, in the last three years, we’ve seen some progress.
And how do you measure that? What do you measure?
We’re going to measure how many decision-makers in the companies we invest in are, for example, women or of diverse backgrounds. But I believe that Artemis has a certain vision on inclusion. Because sometimes people with a migration background are also highly educated, they have a network, they have family resources too. So, is that really the diversity you’re targeting? That can hold us back as well. But it begins with mapping it out and working on it. And we’re trying to find collaborations, like with She Did It, which I’m sure you’re familiar with.
So, it’s a long-term effort that requires us to reach out as well.
I’d like to jump in here. I heard you say, Bart, that you’re looking for objective voices in such an investment committee or among those advising on investments. But as I hear you explain it, Frederik, you’re actually looking for a way to make this more participatory. How you can involve people who are sometimes pigeonholed as a ‘target group’, how they can be part of the solution, and how the market potential of many of these proposed solutions can be better recognised. So, you could say you’re looking for a way to involve ‘engaged advice’, right? That as an investment fund, you get advice from people who have a certain degree of involvement with the potential in that solution.
Exactly—people who can imagine ‘this will work’ or ‘this won’t work’. That’s something that’s very difficult for the rest of us to interpret at times. I think we need to think about how we can organise that. So, apart from the formal investment committee—perhaps there are other ways to involve people in the preparation and assessment of an application.
Now, I’m spontaneously reminded of a book my daughter-in-law gave me: Invisible Women. I don’t know if you’ve read it, and if not, it’s highly recommended. It provides countless examples of how our world is filled with solutions, tools, services, and products designed by men, never considering them from a woman’s perspective. And when you read that, you’re stunned by how foolish we all are to continue mass-producing such things, so to speak… That involvement, that participation from different angles in looking at a solution or an entrepreneurial idea, is indeed something to be encouraged.
I’d like to add to that because when we talk about traditional investment committees, but also still somewhat within Trividend, it’s about what you measure your success by. And yes, if that’s primarily driven by male success factors… If you just look at who works in the financial sector: it’s largely men driven by financial success. And if you look at the care sector, for instance—like at Uilenspel—it’s mostly women who work there. Fortunately, we’ve managed to hire one man, but the connection with that solution, the drive to derive energy from it and say ‘I’m successful if I can solve this’… There really is a difference there.
So, you’d expect that more female entrepreneurs would approach you than men.
Unfortunately, that’s not the case. What we see—and these are broader figures—is that only 10% of start-ups are founded by a woman.
And you don’t exceed that yourself?
We’re at 17% today. It’s better than average.
But still far too low?
Yes, absolutely.
I know from experience that many investors, when they invest in a young company, tend to support that company not only financially but also with advice and guidance. You also take on a board position or a mentoring role in some way. Probably out of self-interest, because if you help guide it, there’s a better chance of success for the company, and so on. Do you do that too? And if so, do you also coach on themes like inclusion if the projects you support are related to that?
In about one in two of our investments—just over half—we effectively bring someone on board in the governing body or advisory board. Sometimes it’s a requirement, as you pointed out, where we say, ‘look, we believe in these two founders’—it’s usually one or two founders in a start-up—‘but there’s a particular competency or network we want to bring in’. Honestly, today, it only happens in a few cases that it’s about bringing that impact vision in. That impact vision: sometimes it’s very much about inclusion, and we notice that for certain start-ups that are growing, it can be tempting to, for instance, look to another country for outsourcing and not continue working with a social enterprise.
We try to embed that in the contract. The reason we invest is that you create jobs in a social enterprise. If you stop doing that, well, we might withdraw. Or you might have to pay more interest, for example. So, we embed that, and sometimes we also bring someone on board to continue pushing that.
In many of the start-ups, the drive is precisely inclusion itself: tackling poverty, social housing, and so on. In such cases, we’re more likely to bring in a financial profile or a marketing expert.
Finally, Frederik, what advice would you give to a start-up entrepreneur today? Or maybe even to an investor?
I have a lot of advice I’d like to give. To begin with, I think what’s very important is that people who have an idea, who, for example, can develop a product, sometimes fall in love with the product or solution and might take too long to ask whether it’s really the right way to solve the problem. Is there a need for it? Will it genuinely solve that problem? They keep developing it, but sometimes it’s better to say, ‘hold on a minute’. And then advice comes into play in the next phase. Surround yourself with other people—be open to that.
You might be great at coming up with a particular idea or solution, but maybe less good at the financial aspect, the marketing side, or really understanding whether this aligns with people’s needs. How do you test whether this is indeed the solution? So, surround yourself with people. And what I also definitely want to stress is that when we talk about inclusion, these are sometimes difficult adjustments to monetise. But if you can map out from the beginning that through this specific way of working or HR policy, you can actually save certain societal costs, that you offer people opportunities and employ them through activation—that has a positive impact on society. Try to map out as early as possible what that entails.
Because the newer, innovative financing methods will also focus on that. Namely, what positive societal externalities do you create with your intervention, or what costs do you save? If you have a clear picture of that, you can position yourself more as a service provider to a local government or the Flemish government. While today, you might still be dependent on subsidies. And those subsidies are going to disappear. But if you can demonstrate, ‘look, through my intervention, you can achieve your government objectives more efficiently’ or ‘I can train and prepare people so well that a traditional company will welcome them and they’ll quickly become productive’. You need to be able to demonstrate that. And then a company might be willing to pay for that. So, it’s a bit of a mindshift towards other types of business models that were perhaps previously funded by subsidies. Today, that’s called ‘outcome funding’. Or you have social impact bonds and the like, which are more designed as a test to see if something works and, if so, you can perhaps start offering services.
For investors—and this applies equally to entrepreneurs—I think it’s essential to surround yourself with a diverse range of financiers. Depending on the phase you’re in, you need different financing. Classic start-ups or even larger companies engaged in innovation, developing new projects, are also often subsidised for research and development. There are many types of subsidies you can use from VLAIO. It’s nothing to be ashamed of.
Sometimes people say, ‘subsidies…?’ No, it’s going to allow you to innovate, experiment, and prove that something works. And then you need to look in the next phase at what other types of financing you can combine with that. If it’s something more challenging—like social housing, for instance, and it generates less return—if you can combine that with a government guarantee or a foundation that also contributes a bit of philanthropy, it might generate sufficient financial return to attract larger investors to the market.
Bring them all together. I think that’s also the future: combining different forms of financing, different perspectives, and that way, you can achieve just enough return.
I feel like we could continue this conversations based on the things you’ve said. Very interesting. And I hope it was interesting for the listeners as well. It probably provides points of departure for further questions, but I assume people are always welcome to contact you? Or Trividend if there are specific investment issues or related matters?
Absolutely: www.trividend.be, and you’ll find all our contact details.
Fantastic, thank you for being here.
Thank you for inviting me; it was a real pleasure. Thank you very much.
Outro:
You’ve been listening to an episode of Let’s Talk About Work, the podcast from the WEB-Blenders group. Our conversations explore work, the path to work, well-being in the workplace, and everything that comes with it. You can find us on your favourite podcast platform and at www.blenders.be/podcast. Follow us on social media: on LinkedIn, you’ll find us under Podcast Let’s Talk About Work; and on Instagram as blenders.podcast.letstalk. You can also stay up to date through the Blenders newsletter. Were you captivated? Has this conversation got you thinking? Would you like to be one of our future guests? Let us know via info@blenders.be and who knows, you might soon join us at the table.