A reverence deserved

Europe’s best-known accelerator programme has shared the details of its latest US marathon with The Kernel. Milo Yiannopoulos took the opportunity to review Seedcamp’s performance to date.

Perhaps the most telling statistic about Seedcamp’s recent marathon around the United States, during which the start-up incubator took twenty of its portfolio companies on a whistle-stop tour of leading investors and technology businesses on both coasts, is that more than 250 mentors were involved. That’s a staggering number of people, and, judging by the results partner Reshma Sohoni and her team has garnered, even more impressive for their overall quality.

In other words, Seedcamp’s early investment in an extensive mentor network and high-level connections is yielding returns. As a result of twenty company visits, sixteen visits to investors and forty-one stop-overs of various other kinds, Seedcamp’s portfolio has already secured three term sheets from investors and significant interest from some thirteen others. Even more impressively, over fifty commercial partnerships have been set up. (The team has been back in the UK for a week.)

The US trip was evidently lively - something Seedcamp’s Tumblr makes clear. Amid the fun and frolicking, however, appears to have emerged a new confidence among the management team, who, when I caught up with them last week, exuded a fresh sense of purpose and poise. Their strategy is now clearer; their communication more precise. Seedcamp is transforming itself from a nebulous but popular entity into a lean and efficient mentorship network, business development shop and fundraising coach.

And the management team has every right to be riding high at the moment. Seedcamp remains the pre-eminent accelerator on the continent and a gold standard against which others are judged. Despite under-staffing and a few hiring mis-steps during the lifetime of its first fund, about which I once wrote elsewhere, Seedcamp is on course to return money to the investors in Seedcamp I – “and then some,” according to Sohoni – while the class of Seedcamp II is looking easily as strong. Stronger, even, as most connected with Seedcamp would certainly claim.

The diversity and broad ambition of the current crop is evident with the most cursory glance through the portfolio contingent on this latest trip, by far the longest and most ambitious Seedcamp has staged. It includes businesses such as TransferWise, which aims to help consumers save money on foreign currency transactions, Socialbro, and advanced social media management tool, pult.io, a “Slingbox without the box”, 24symbols, a “Spotify for books” and Holvi, which aspires to replace banks for group activities.

It’s too early to judge the success of the second fund, but one US venture capitalist I spoke to on Friday, a partner at one of the firms visited by the Seedcamp cohort last month, said he had never seen such consistent and impressive quality from a European trade mission. Unlike some other European accelerators, Seedcamp appears to interface effortlessly and, more crucially, credibly with Silicon Valley and beyond.

Its success, then, comes partly as a result of getting the right people in the room. The accelerator’s portfolio were last month pitching not only in front of the most prestigious firms in the Valley, but to the decision-makers there: partners, not associates. This is another benefit to the programme that often goes unmentioned but which can speed up dealmaking by an order of magnitude for the start-ups lucky enough to be present.

Perhaps it’s also because Seedcamp is an entirely private sector initiative, which interfaces sparingly and on its own terms with Government. Sohoni was just last week one of the first prominent members of the European investor community to openly question UKTI’s Tech City Investment Organisation on stage at the London Web Summit – not a remarkably courageous move, you might imagine, but one her peers have been reluctant to make for fear of missing out on favours.

Unlike some VC firms currently in trouble, Seedcamp has no need of favours or cash from the state. It has an extraordinary level of buy-in from almost the entire European venture and entrepreneurial communities. Even those VCs who elected not to invest in Seedcamp II after participating in the first fund, such as Balderton Capital, have nothing but praise for what Sohoni and her team are doing.

This is partly due to the almost unique deal-flow Seedcamp provides as a result of its presence in central and eastern Europe, and partly because in those less well-trodden markets in which it operates, Seedcamp alumni are seen as role models by other young entrepreneurs. In other words, the virtuous circle of entrepreneurship Europe so desperately needs is nowhere more excitingly spearheaded than from the fingertips of Sohoni and her colleagues.

Consequently, Seedcamp’s model is rapidly validating itself. The firm now has four employees and a packed events calendar, making it, in venture capital terms, an expensive firm to administer. But the deliverables from its most recent sojourn would appear to indicate that this is money well spent. Cross-pollinations within the portfolio, as well as external partnerships, are flourishing, spawning new ideas, new applications for existing technologies and providing a role model for other programmes in Europe.

What really sets Seedcamp apart from other European accelerators and incubators is the seriousness with which American investors take it. After all, what matters to Seedcamp’s portfolio is whether they can go on to raise significant sums of money to build their businesses, and money can be hard to raise in Europe. On that metric, at least, Seedcamp remains peerless.

Many of the businesses being showcased in the US last month had already been seen in Europe, and turned down for investment, but American investors are willing to take a punt on new consumer-facing products in a way that European VCs often aren’t. It is easier to sell enterprise and business-to-business software in Europe; in America, this is just one of a variety of investible technology businesses.

What Europe short-sightedly overlooks, America – with Seedcamp’s help – is snapping up. That’s what makes Seedcamp so critical, so exciting and so valuable to the European entrepreneurial landscape.