As pre-seed and seed funding increasingly becomes a commodity, even in more modest Europe, something has to give. That something is VCs offering and talking up what they call ‘operational support’ for the startups they invest in.
This can be something as hands-on as startup studio/early investor Forward Partners, which recruits non-technical founders and provides them with developer and other support to help find market and product fit before recruiting a full team of their own.
Or in the case of Seedcamp, more along the lines of the Andreeson Horowitz model by recruiting a range of expertise in-house, whether it be full-time staff or Experts-in-Residence (EIRs), to support the startups it invests throughout their ‘life cycle’.To that end, the European pre-seed and seed investor — Seedcamp has long moved on from its early accelerator model, including raising a new $28 million fund last year — has made a number of noteworthy hires to bolster the operational support it offers.
These include three new EIRs: Scott Sage (ex-Draper Esprit), Keith Wallington (Previously COO of Mimecast, which just filed for IPO), and Taylor Wescoatt (ex-Seatwave and eMoov), who will provide expertise in the areas of B2B and fundraising, growth, and product, respectively.
In addition Seedcamp has recruited a full-time Head of Talent, Jamahl McMurran, to help recruit for its portfolio companies, and a Head of Communications and Marketing, Cathy White, who will advise Seedcamp startups on everything from launch PR strategy to social media campaigns.
Europe as a whole has to rise… as things become more democratised in terms of capital
In a call, Reshma Sohoni, partner and co-counder of Seedcamp, explained that part of the thinking behind bolstering the fund’s operational support is that early-stage capital, particularly pre-seed and seed, has become “democratised”.
This means that the onus moves to how investors can support their portfolio companies as they vie for the best entrepreneurs and most promising startups.
“Europe as a whole has to rise… as things become more democratised in terms of capital,” she told me. “The U.S. guys can reach into Europe quite easily and vice-versa, so I think everyone has to get to a more level playing field in terms of how they support companies.”
Hence Sohoni says Seedcamp is adopting what might be thought of as a ‘mini-Andreeson Horowitz model’, citing the Silicon Valley VC’s straight forward terms and “brilliant” support, something that it hopes to mirror, even if on a much smaller budget.
“Even with our small size we’re doing what we can in offering that kind of support,” she adds. “I think it’s almost easier for us to grow into, having come from a traditional accelerator world and have tapped into experts and mentors, than VCs who have to go the other way”.
On that note, I’m told that EIRs Sage and Wallington are not full-time (though Wescoatt is) but are spending around a third of their time or more with the early-stage investor and its portfolio companies and all three have a commercial agreement with Seedcamp.
Sohoni was also keen to stress that EIRs get a lot in return, not least working with new startups and ideas and, of course, increasing their own deal-flow where applicable.
(Separately, I’m hearing that Sage, who actually joined Seedcamp four months ago, is also busy raising a fund of his own along with fellow ex-Draper Esprit General Partner Krishna Visvanathan.)
Meanwhile, Seedcamp is disclosing that it has made 70 investments (both pre-seed and seed) in the last year, including 24 deals since launching the new fund, making it one of Europe’s most active investors.
They include both B2B and B2C startups across different sectors including SaaS, Fintech, Marketplaces, Mobile, Property tech, Food tech, E-commerce, Hardware, and Cyber-security, with Seedcamp typically investing up to €200k into a seed round between €300k and €2m.