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IDCEE - models of early stage funding

by Seedcamp on Nov 01, 2010

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A presentation on the currently prevailing modes of seed funding in Europe and the US for the IDCEE in Kiev, November 29th, 2010.

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A presentation on the currently prevailing modes of seed funding in Europe and the US for the IDCEE in Kiev, November 29th, 2010.

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‘ s me!
This is what Seedcamp looked like in the year 2010 – loads of events, startups, great mentors, and companies.
See the new additions to our portfolio in green
There are some more macro reasons for this talk – just the simple growth in numbers of successful entrepreneurs has widened the market.
This is what the funding cycle used to look like. See this in every single book, presentation, and paper about entrepreneurship and VC.
You can still segment the phases in seed, startup and growth parts, but things get a lot more crowded in the early stages.
Giving back and hopefully making money. Will always be there and are probably the most underrated of all investors.
These guys think of ideas for companies, either in cooperation with or in search of founders and management for these companies. Many of these models evolve out of corporate structures, universities or other constituents who feel they have a competitive advantage in their field. I believe they will be more successful this time around, mainly because of the cheaper nature of startups and fast paths to profitability. Important: deep pockets and a long breath, no probable quick successes. Also, need to make a decent amount of bets to work.
Giving back and hopefully making money – Angels are still here and are investing a lot of money. As always, they are very active in their respective domains and focus on smaller issues – they can ’t afford to go for all of the trends at once.
Super angels are more professionally organised angel investors, often also investing OPM. They are very lean run organisations, often hinging on one or very few people. They invests small sums and are active in various markets – a very interesting phenomenon. We should eventually see these structures growing to be more sophisticated and “ processized ” when they get more capital and see where they are going.
These guys know what they are doing and they are simply adjusting to the realities in the market – startups are cheaper, and there is a lot to do in the early stage. Be prepared to see the later stages go through a similar disruption to what is happening in early stages now – there will be much more supply and opportunities in the typical b round stage in about 2 years, when a lot of great investments will be made.
I don ’t feel any of the above categories to be fighting for deals – at least not more than before. We see investments all over the place including all categories of investors, so it is obvious that we all have adjusted to the new models. Seedcamp companies are raising across all of these categories (literally all of them) right now.
Three main reasons exist for these different categories of investors. The less expensive and simpler start up is the main reason for smaller investors to be so active. Small exits are quicker to reach, and companies in exitable size are easier to build. It might be less important than it seems to classify investors, but it is important to understand where each individual investor stands. Entrepreneurs should look for the right partner in any case – and no two companies are alike.
In essence, we will see much more professional investment in early stage startups, maybe increasing the quality substantially. Experienced investors can give input and feedback that might make companies successful or at last surviving. Also, more drawn out exits with stricter earn outs (or more operationally focused earn outs) will be interesting, since buying startups is a lot about transferring culture as well. In aggregate, we should see more entrepreneurs and founders – the current economic climate is still a great place to start.
We try to work with all different types of investors – because we need to. All of our companies come in different stages, in different industries and geographies. Sometimes it ’s important to look out for the big scale and home run, sometimes its smarter and more fitting to take your time and find product market fit with a smaller investment.
The main reason this works is our position within our network of investors and mentors. We are able to scale the process, something which usually is very hard to accomplish. A lot of follow on comes fron our own investors, a lot of our mentors help out and become involved in the companies. This way, we both strengthen and play on the strengths of our network.
Get in touch. And follow us. http://www.facebook.com/seedcamp

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Paolo Borella at Boro Oy 7 months ago

IDCEE - models of early stage funding — Presentation Transcript

Capacity Building for Europe ’ s Next Generation Technology Entrepreneurs
Who is this guy? Philipp Moehring @pmoehring Associate at Seedcamp portfolio management, organization, events, general tidying up Biz head, startup heart business education, experience in startups, tech, venture capital
What is Seedcamp A micro-seed fund that enables talent across every part of Europe to start up strong internet technology companies. Recognized as a leading platform bringing together tech entrepreneurs and mentors across Europe, US, Africa, and Asia
A year-long program supporting seed stage start ups in Europe Mini Seedcamps TEAMS PROPRIETARY CRM DATABASE LUNCHES, DINNERS WITH MENTORS DEMO INVESTOR, BROAD INVESTOR DAYS 4 person team running it TRIP TO VALLEY AND CONFERENCES 20+ MENTORS 300 INVESTMENTS 11 EQUITY 8%-10% SHORTLISTED MINI SEEDCAMP TEAMS PROPRIETARY APPLICATIONS AND JUDGING SYSTEM ISRAEL, PARIS, LONDON, WARSAW, BERLIN, SWEDEN, LJUBJANA, KIEV STARTUPS 220 LOCAL ADVISORS 700+ MENTORS 600+ Investment Seedcamp Week 3 Months Mentoring FUNDING € 50K
33 companies across 17 geographies Kyko
New models of seed investing Start ups are cheaper More folks with experience & network Quite a compelling job
Who has seen this? FFF “ proper VCs” Angels
So what ’s happening? FFF “ proper VCs” Angels Super Angels Growth Funds VCs’ Seed funds Builders Incubators PPP/Gov Micro Seed
FFF Friends, Family and others Always been there W on ’ t go away
Builders & Incubators Involved in ideation Take large stakes (not all!) Added benefits (corp, dev, etc)
Angels Experienced individuals Giving back Not a full time job
Super Angels Experienced individuals OPM – other people ’s money Definitely a full time job Lots and lots of deals
VCs ’ seed funds Carve outs Get in on the action Signaling problem? Adding value & easing follow on
But: we ’re all friends Everybody can play together More deals = more opportunity Everybody does play together
Why? Earlier proof points easy to reach Smaller exits and profitable companies Inefficient markets allow for specialisation
Results More start ups Smaller exits in untraditional ways More movement, more entrepreneurs
Where is Seedcamp in this All shapes and sizes Follow on by angels, super angels, VCs, PPP, international investors, bootstrapped Scaling acceleration across Europe and US
Secret Sauce Deal sourcing at scale Investing at volume Building globally
Get in touch Follow us: facebook.com/seedcamp and @seedcamp @pmoehring and pmoehring.de www.seedcamp.com

IDCEE - models of early stage funding

by Seedcamp on Nov 01, 2010

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IDCEE - models of early stage funding — Presentation Transcript