Sugar Daddy looks to pimp ethnic entrepreneurs

The Dutch Suikeroom (Sugar Daddy) foundation wants to help ambitious ethnic minority entrepreneurs set up companies with money and practical advice.

Modesty is not Hedley Riley's strong suit. "Since 1903 we have had only flat buttons and snap fasteners. Me, I've just invented a third kind of button," said the tall 53-year old Aruban in his three-piece suit as he snapped what looked like the top of a traditional cuff link onto a normal-looking white shirt button. "Much sturdier than a regular button and you can customise it endlessly."

Hedley got the idea when he was working for a construction company and he was asked to come up with a system to attach heavy objects to a wall in such a way that they could be easily removed. Hedley sees a bright future for his revolutionary button, and the Sugar Daddy Foundation is helping him make his dream come true.

Negative portrayal

Officially launched on the steps of the Amsterdam city theatre on Wednesday, the Sugar Daddy Foundation (Stichting Suikeroom) is a fund for ethnic start-up companies financed by established companies.

The economic crisis seemed far away at the foundation's launch. Among the cocktail-drinking crowd the talk was about new shops to be opened, contracts to be landed, and about showing the world that people from immigrant backgrounds can be successful entrepreneurs too.

Amos Frank spent the last three-and-a-half years setting up Sugar Daddy. He had seen how people from immigrant backgrounds had been consistently portrayed in a negative fashion ever since the 2002 murder or film maker Theo van Gogh by a radical Moroccan-Dutch Muslim. He wanted to change that.

According to Frank, ethnic minority businessmen often lack the connections and the networks that are needed to successfully start a business. He had the idea to set up a foundation through which established investors would not just offer their money, but also their free advice and their networks.

Not a charity

Finding the investors wasn't the problem, said Frank. "It was finding people who were willing to spend time on setting up a structure for the foundation. Everybody was just too busy."

And having professional management was a precondition because Sugar Daddy doesn't want to be a charity. Frank: "We're a holding company so everybody has an interest in seeing these start-up companies become a success. If Hedley Riley becomes a billionaire with his buttons then all the participants will share in the profits."

Only entrepreneurs of ethnic minorities can apply for funding from the foundation. Candidates have to show up for five to ten interviews in which their business plan is discussed. "Only when they have passed this selection process are the entrepreneurs introduced to the investors."

How much the foundation invests in these start-ups Frank didn't want to say. "The fund is worth about 700,000 euros right now. Let's say Sugar Daddy typically invests 40,000 to 150,000 euros," he said.

Keeping control

And who are the investors? There are all kinds, said Frank. "There are people from the financial sector and from IT companies, but there is also the founder of Intratuin, a chain of nurseries."

Liza Koifman - 27-years-old and a "100 percent Russian import from 1990" - and Tomas Overtoom - 29-years-old "with Indonesian roots and a Jewish mother" - were discussing the presentation they had just given over a glass of wine. Koifman and Overtoom recently started the fashion label OntFront. They seemed just as comfortable talking about how their designs are influenced by Russian czar Nicolas II's fashion sense as about cash flow and the benefits of outsourcing production to China.

The choice to go with Sugar Daddy was well thought-out, said Koifman. "We looked at other investors but the advantage of Sugar Daddy is that we remain the majority shareholder and so we get to keep control of our own company. At the same time we get free advice and connections from other successful entrepreneurs."

One of their investors, the founder of an IT company, advised them on online marketing, "and how to get the highest possible score on Google".

Big in China

Both OntFront and Hedley Riley already have a finished product, but their companies are still in their infancy.

Koifman and Overtoom hope to see trendy Chinese wearing their outfits by next year. They were recently approached at a Hong Kong trade show by a businessman who wants to produce their clothing in China and put their designs in dozens of department stores there.

"They really see us as Dutch design over there and that's considered trendy right now," said Koifman. The irony that Sugar Daddy is helping them precisely because of their not-so-Dutch roots hadn't escaped her. "For the Dutch catalogue we'll be using lots of foreign models, but for the Chinese catalogue we'll definitively have European models," she said.

Hedley Riley has big plans too. He already signed a contract with Society Shop, a fashion retailer.

"At first they wanted nothing to do me. I would keep insisting, they would keep saying no. But in the end they decided my button had merit." In March there is a big trade show where Union Knopf Gruppe, the biggest buttons producer in Europ will be present. Ridley wouldn't mind going into business with them - "and then conquer the market."