Entrepreneur First (EF), the London-headquartered “talent investor” that recruits and backs individuals pre-team and pre-idea to enable them to found startups, has raised a new fund of its own to continue scaling globally.
The $115 million first close was led by a number of leading (mostly unnamed) institutional investors across the U.S., Europe and Asia, including new anchor LP Trusted Insight. A number of well-known European entrepreneurs also invested. They include Taavet Hinrikus (co-founder of TransferWise), Alex Chesterman (co-founder of Zoopla), and EF alumnus Rob Bishop (who co-founded Magic Pony Technology which was bought by Twitter for a reported $150m in 2016).
This new fund — which EF says is one the largest pre-seed funds ever raised – will enable the talent investor to back more than 2,200 individuals who join its various programs over the next three years. EF currently operates in Bangalore, Berlin, Hong Kong, London, Singapore and Paris.
This will translate to the creation of around 300-plus venture-backed companies, three times the number of startups it has helped create in total since EF was founded by McKinsey colleagues Matt Clifford and Alice Bentinck all the way back in 2011.
As part of the same announcement, EF says that General Partner Joe White has relocated to Silicon Valley where he’ll focus on growing EF’s investor network on the West Coast. Perhaps the move shouldn’t come as a total surprise — White is the husband of Wendy Tan White, who was recently recruited by Alphabet’s X (formerly Google X) in Mountain View — but either way it feels like a smart move from EF’s perspective as the talent investor, which is also backed by Reid Hoffman’s Greylock, seeks to create further ties to Silicon Valley.
Comments co-founder and CPO Bentinck: “We pioneered a new model of talent investing, and it’s encouraging to see this become a new frontier for venture capital. We believe the world is missing out on some of its best founders because of ecosystem constraints, a lack of co-founders and difficulties getting early pre-company funding. Entrepreneur First is changing that”.
EF is also sharing some data with TechCrunch, revealing for the first time numbers related to the number of EF graduating startups that have gone on to raise outside capital. For the 2015 “vintage” cohort, there were 16 seed rounds, 8 Series A, and now 2 Series Bs. For 2016, 24 seeds, and 5 A rounds so far. For 2017, 41 seeds, and 2 A rounds. And for 2018, 57 seeds, and 1 Series A already.
A slide thought to be from EF’s recent LP pitch deck
“The graph shows the volume of EF companies funded by VCs each year since 2015 (e.g only those that raise a successful seed, not just those funded by EF),” White tells me. “The average age to series A is 40 months according to Pitchbook or 60 months to series B. Many of our companies are already ahead of that schedule, but many more will reach these milestones in the next 12 months”
TC: You’ve announced the first close of a new fund — $115m. What is the remit for the fund and how does it fit into the broader EF program and funnel? I.e. is it mainly for follow on funding so EF doesn’t get too diluted for the most promising companies it helps create?
MC: The main thing we’re doing with this fund is taking our talent investing model global. We’ve always said the world’s missing out on some of its best founders and now we’ve got the capital to change that. It’s true it’s a lot bigger than our last fund, but that’s mainly driven by scaling internationally, not by a change in investment strategy. This fund will do stipends, pre-seed, seed and Series A investing in all our companies globally. It gives us capacity to fund 2,000 individuals around the world over the next three years.
We’ll absolutely be backing the best Entrepreneur First companies up to their Series A, but we’ve been doing that since 2016, so no change there.
TC: An earlier SEC filing suggested the fund was going to be much bigger. What happened?
MC: As far as I know, you have to file the hard cap with the SEC, but that’s not a target. This is a first close, not a final close, but with $115m we can fully fund all six sites for three years, which is great.
TC: Like previous EF funds, the new fund’s LPs include many known founders and angel investors from the London tech scene and beyond. But this time around I gather you have some quite large institutional LPs, too, including from the U.S. How were those conversations different this time or was it simply the Reid Hoffman effect after Greylock Partners became an investor in EF itself?
MC: Yes, this is definitely a “growing up” fund for us. Our first “fund” in 2013 was under £400K, so a lot’s changed! Almost all this capital comes from institutional LPs and they include some of the best investors in venture capital funds globally. EF is a totally new stage of VC – talent investing – and LPs are quite rightly naturally fairly conservative. So Joe and I and the rest of the team have put in a lot of work to get institutions comfortable with something radically different and we feel it’s really paid off.
Certainly having Reid and others involved has helped a lot, but EF is just generally a very different beast from when we closed the last fund: the portfolio is now valued at well over $1.3bn; we’ve had $300m of exits; the fastest growing alumni companies have been funded by some of the best VCs in Europe and the US, etc. So across the board we had a lot more to show.
TC: EF began life calling itself a “talent-first” investor based on the EF program recruiting potential founders pre-team and pre-idea, which made you an outlier at the time. In that sense, you were — and I hesitate to use the word — ‘disrupting’ startup founding and traditional career paths. But now it’s starting to look like the EF model is a ruse to disrupt early stage venture capital or is that too simple an analysis?
MC: Haha! Alice and I are still much more interested in disrupting careers than disrupting VC. What I would say is that we believe we’re heading for a world where many more of the most talented people will become founders and most of those people won’t be in established tech ecosystems. We think that makes the opportunity hard to capture for traditional VC, because it assumes away the real problems – above all, where to find a world-class co-founder.
But we’re very much ecosystem players. I think we’ve now co-invested with pretty much every seed fund in Europe and SE Asia and I think they’d all tell you we play nice.
TC: It’s been reported that in a bid to expand globally, EF has come up against scaling issues with regards to matching founders and company formation. I’ve heard from my own sources that there were teething problems in Berlin, for example. What’s really going on?
MC: It’s definitely the conventional wisdom that VC isn’t scaleable, but I think we’re proving that wrong. If you take our core metric of co-founder matching, our most recent European cohorts had the highest matching rate so far – over 80% of people who joined us found a co-founder (though of course we don’t fund every team that forms). Similarly if you look at our first Paris cohort, it has one of the highest investment rates of any cohort we’ve ever done (and we’ve done 21 cohorts so far). Honestly, we’re really happy with the way the international expansion went, though I’d be the first to say that scaling is hard and we’ll make mistakes!
TC: We’ve seen a few EF clones appear. Sincerest form of flattery or blatant opportunism? And which, if any, part of EF is defensible?
MC: I always remember Paul Graham being asked this about YC clones and saying he felt “like how JK Rowling would feel if someone wrote a book called Henry Potter”. Joking aside though, I think YC has shown that highly defensible network effects in VC are possible. There are literally hundreds of YC clones and yet 95% of the value in accelerators has accrued to YC. I think we’re on track for something similar in the talent investing space.
The key way to think about defensibility is at the level of the customer – i.e. the founder. Which talent investor do you want to join? You want to join the one with the highest quality potential cofounders. Which one has that? Well, unsurprisingly, the one with the track record, the best alum, the best network, etc. Once you’ve established that – and EF is 5 or 6 years ahead of the clones – it’s very difficult to catch up and the advantage compounds quickly.
TC: You shared some stats with regards the success rate of EF startups and the figures look encouraging. But what we don’t yet still have are many exits. This isn’t surprising given that you invest incredibly early so it will take time for startups to move through the cycle, but it also means that LPs backing EF continue to take a leap of faith. Is that a fair statement and what was the major pushback you got from LPs that declined not to join EF on this next phase of your journey?
MC: For sure, that’s fair. The numbers look great on paper, but it’s way too early to see significant cash returns. In fact, right now we don’t want more exits, as we want our best companies to keep growing privately for as long as possible. Last year, the portfolio raised more money than they had in the history of EF before that put together, so we’re feeling very positive.
It’s definitely true that some LPs don’t want to invest until you’ve returned a whole fund, but fortunately lots of them put in a lot of time to understand the model and were willing to partner with us for the long-term. This will be a big year for the portfolio – no big exits, I hope, but lots of momentum on revenue, product and funding for sure.
TC: Lastly, you now have a General Partner and EF’s CFO Joe White (who I understand was instrumental in helping to raise this new fund) posted to Silicon Valley, where he’ll be helping to grow EF’s investor network on the West Coast. How important is U.S. venture capital to EF’s future and when can we expect to see EF launch a program across the pond?
MC: Yes, Joe and I spent a lot of time on planes and in the US last year to pitch LPs! The vast majority of the capital in this fund is US-based and, of course, Reid and Greylock are there too. What Joe, Alice and I all believe is that Silicon Valley remains perhaps the best place in the world to scale a tech company, even if it’s no longer the essential place to start one. This means that being able to build relationships with the best US VCs is a key competitive advantage for an EF company.
We’ve already seen some of this, with Insight leading Tractable’s B round and Founders Fund leading Massless’s (EF LD9) seed. But Joe being there full time is an ideal way for us to accelerate this and I think you’ll see a bunch of EF companies raise US-led B and C rounds this year. The key is the right capital at the right time.
We’re still thinking hard about our next stage of expansion. It’s hard to see a major need for EF in Silicon Valley itself, but there may be a big opportunity in other parts of North America. Watch this space…
Source: TechCrunch
Changes to the video site’s community guidelines go into effect Feb. 25.
Source: CNET
Filmmakers collected stories from real women who work in STEM, then turned them into a web series.
Source: CNET
Samsung is expected to unveil the Galaxy S10, S10 Plus, S10E and a 5G version in San Francisco.
Source: CNET
President Trump is expected to sign into creation the Space Force today, as a special branch of the military overseen by the Air Force Department, according to a report in The Washington Post.
The President’s decision is considered a win for the Air Force and Defense Department broadly, which had argued against setting up an independent military department based on their concerns that it would add new layers of bureaucracy, according to the Pentagon .
Speaking at an event at The Brookings Institute, Air Force chief of staff Gen. David L. Goldfein discussed the decision-making process around the creation of the Space Force — saying that Defense Department officials had discussed a range of options from creating an entire department to establishing a smaller, professional core of personnel, like the Army’s Medical Corps.
With the decision, the Trump Administration is likely to establish a service that looks more like the Marine Corps, which is part of the Navy but unique within it, than an entirely new branch of the military. The Space Force will be led by a four-star general who will have a set on the Joint Chiefs of Staff, but it will not have a secretary-level post, according to the Post report.
These days, those operations consist of communications, surveillance and satellite defense, but as plans continue to set up more permanent bases on the Moon and eventually Mars, these efforts could expand to protect personnel as well.
The U.S. disestablished the Space Command in 2002 under the George W. Bush administration. Created in 1985 during the Reagan administration’s second term when the “Star Wars” missile defense program was in full swing, the Space Command was tasked with defining strategic objectives for the U.S. in space, and executing them.
When President Trump announced the new Space Command in December, Air Force Secretary Heather Wilson said that the surge in threats to America’s space program warranted the resurrection of the program.
“We are shifting to a war fighting culture at the explicit recognition that it is a war fighting domain,” Wilson was quoted by Space News as saying at the time. “Adversaries are developing capabilities to deny us the use of space in crisis or war. The creation of a unified command puts focus on the ability to protect our assets on orbit and prevail if called upon.”
Source: TechCrunch
YouTube announced changes to its strikes system for its content creators. The changes include a softer first-offense penalty for creators who violate YouTube’s guidelines and more consistent penalties for further violations.
The post YouTube changes its strikes system, offers softer first-offense penalty appeared first on Digital Trends.
Source: Digital trends
Season 4 of Catastrophe is coming to Amazon.
Source: CNET
The new 800 Series models emphasize a counter-depth build and go on sale later in 2019 as part of “the broadest refrigeration portfolio in Bosch’s US history.”
Source: CNET
Over the past few years, Amazon -owned Audible has been expanded beyond audiobooks to include more original content, like the short-form audio programming offered through Audible Channels, for example. Today, the company announced a new partnership for original comedy projects, in collaboration with Lorne Michaels’ Broadway Video. The first production from this effort is “Heads Will Roll,” a program created, produced by and starring Kate McKinnon and Emily Lynne.
The production itself is a workplace comedy about an evil queen in search of peace and quiet. It will also feature performances by Meryl Streep, Tim Gunn, Peter Dinklage, Andrea Martin, Carol Kane, Audra McDonald, Aidy Bryant, Alex Moffat, Heidi Gardner, Chris Redd, Steve Higgins, Bob the Drag Queen, Esther Perel and “Queer Eye’s” Fab Five.
Following “Heads Will Roll,” the next production will be “63rd Man,” from senior SNL writer Bryan Tucker and Zack Phillips. WWE Superstar John Cena will star as Billy Foster, a college football star who’s just barely not good enough to play in the pros.
The two new shows will join Audible’s collection of original content which today includes programming in areas like journalism, literature, theater, romance, sci-fi and fantasy, and kids. Last year, Audible announced plans to partner with Reese Witherspoon’s media empire, Hello Sunshine, on original content in addition to the Reese Book Club on Audible, but those originals haven’t yet arrived, it seems.
Though its operates as a separate business unit from Amazon, the retailer leverages Audible’s programming to serve as another perk for Amazon Prime subscribers. Audible Channels, for example, are available to Prime members for free.
In addition, Audible content now ties into Amazon’s Alexa business, too. In addition to offering Audible’s audiobooks and originals on its Amazon Echo devices, the company recently launched choose-your-own-adventure stories on Alexa.
The launch dates for the new comedy series have not yet been announced.
Source: TechCrunch
For the first time later this week, a privately developed moon lander will launch aboard a privately built rocket, organized by a private launch coordinator. It’s an historic moment in space and the Israeli mission stands to make history again if it touches down on the Moon’s surface as planned on April 11.
The Beresheet (“Genesis”) program was originally conceived as an entry into the ambitious but ultimately unsuccessful Google Lunar Xprize in 2010, which challenged people to accomplish a lunar landing, with $30 million in prizes as the incentive. The prize closed last year with no winner but as these Xprize competitions aim to do, it had already spurred great interest and investment in a private moon mission.
SpaceIL and Israel Aerospace Industries worked together on the mission, which will bring cameras, a magnetometer, and a capsule filled with items from the country to, hopefully, a safe rest on the lunar surface.
The Beresheet lander ahead of packaging for launch.
The launch plan as of now (these things do change with weather, technical delays, and so on) is for takeoff at 5:45 Pacific time on Thursday — 8:45 PM in Cape Canaveral — aboard a SpaceX Falcon 9 rocket. A live stream should be available shortly before, which I’ll add here later or in a new post.
30 minutes after takeoff the payload will detach and make contact with mission control, then begin the process of closing the distance to the Moon, during which time it will circle the Earth six times.
Russia, China, and of course the U.S. are the only ones ever to successfully land on the Moon; China’s Chang’e 4 lander was the first to soft-land (as opposed to impact) the “dark” (though really only far — it’s often light) side and is currently functional.
But although there has been one successful private lunar flyby mission (the Manfred Memorial probe) no one but a major country has ever touched down. If Beresheet is a success it would be both the first Israeli moon mission and the first private mission to do so. It would also be the first lunar landing to be accomplished with a privately built rocket, and the lightest spacecraft on the Moon, and at around $100M in costs, the cheapest as well.
Landing on the Moon is, of course, terribly difficult. Just as geosynchronous orbit is far more difficult than low Earth orbit, a lunar insertion orbit is even harder, a stable such orbit even harder, and accomplishing a controlled landing on target even harder than that. The only thing more difficult would be to take off again and return to Earth, as Apollo 11 did in 1969 and other missions several times after. Kind of amazing when you think about it.
Seattle’s Spaceflight coordinated the launch, and technically Beresheet is the secondary payload; the primary is the Air Force Research Labs’ S5 experimental satellite, which the launch vehicle will take to geosynchronous orbit after the lunar module detaches.
Although Beresheet may very well be the first, it will likely be the first of many: other contenders in the Lunar Xprize, as well as companies funded or partnering with NASA and other space agencies, will soon be making their own attempts at making tracks in the regolith.
Source: TechCrunch