Before distributing the prize money we will look at various things, such as the Articles of Association. How are you governed? How are you supervised? Do you have a company bank account? Where are you legally established? The reason we are being so thorough, is that we hold the winners accountable for their actions. Otherwise, how can we make sure the money is being spent correctly?
Alexander van der Have and Lineke Post from the DOEN Foundation are responsible for guiding the Postcode Lottery Green Challenge winners after the contest is over.
"We get in touch with the winners after the contest is over. We also explain that they shouldn't expect the money to be transferred overnight, because we have a whole administrative procedure to follow as well, to make sure the money is allocated correctly."
What happens after a finalist wins the Postcode Lottery Green Challenge?
After we've established contact, we start the administrative process. We will look at various things, such as the Articles of Association. How are you governed? How are you supervised? Do you have a company bank account? Where are you legally established? The reason we are being so thorough, is that we hold the winners accountable for their actions. Otherwise, how can we make sure the money is being spent correctly?
Is the prize money distributed all at once or in installments? Within what timeframe?
We won't transfer the lump sum to your account all at once. We check the administrative side, and then based on the business plan you handed in there are a couple of logical goals and timetables that we adhere to. Basically we need to understand where you're at and what your plans are for the coming time and we want to hold you accountable because we're going to distribute the money in tranches. It's all about getting the administration right and setting up a timetable so we can transfer the money accordingly.
Mostly there is an initial allocation, and then the second allocation will typically happen after a year or so. Theoretically we could make the first money transfer within 2 weeks after someone wins the Postcode Lottery Green Challenge, if all credentials and papers are in order.
Are plans discussed? Have you ever advised previous winners against spending the money on something you didn't agree with?
It's not something we've ever encountered. Typically of course the finalist got through to that phase already, and there is enough due diligence involved that you're not going to come across any quirky things. Our role is passive in the sense that we can make a lot of suggestions but of course it also depends on a need from the finalist's side. Some of the winning companies are quite clever and they really take the time to invest in their relationship with DOEN. They understand that we're not just about allocating the money but we also do a number of other things and we're involved in a lot of interesting projects that could possibly enrich their business plans, and it could be worthwhile for them to invest in us.
The DOEN Foundation is always on the lookout for interesting projects, so Postcode Lottery Green Challenge winners and finalists are definitely on our radar. We could for example look at the next stage of financing or connect them to all sorts of initiatives that we're already supporting.
Potential pitfalls for winners?
Some pitfalls could be:
- Lack of focus. Focus on what you want to do specifically, what your product is all about. Pivot when necessary.
- Forgetting about having potential customers lined up. Being so excited as an entrepreneur about developing your product that you forget about your market.
- €500,000 is a lot of money for a start-up, but it's only going to take you so far. I would suggest they start right away getting other investors on board and getting extra financing in place. Most people forget that it takes a long time to actually get the financing in your account. You don't want to be with your back against the wall, asking for money. You want to be in a stronger position.
- To make things happen you have to share the dream. Start-up companies are always struggling with ownership, because the product is their dream. They also have to realise that to make things happen you have to share the dream. And practically that means giving up ownership in part, if an investor comes along. A lot of starters want to remain at least a majority shareholder. Also they want to do it their way, and only their way, while it really pays off to open up to possibilities.
Molly Morse (United States) won in 2012 the competition with her company Mango Materials. Mango Materials uses bacteria to turn methane gas into affordable biodegradable plastic. A short interview with Molly: