Last week during the Queen’s birthday honours, Entrepreneur First (EF) co-founders Matt Clifford and Alice Bentinck were recognised with MBEs for their roles in supporting British startups. Last night, the organisation won an award at The Europas conference and ceremony in London. So what gives?
Entrepreneur First is a unique program that takes a very different approach to fostering startups than your traditional accelerator.
Clifford is quick to emphasise that Entrepreneur First is not an accelerator, though, and that it’s interested in the individual rather than the idea. “We think that [accelerator] model is pretty broken and really dying in a lot of ways,” he told Tech.eu.
Instead, the London-based company tries to woo potential founders and entrepreneurs into joining EF’s six-month program where for the first three months they set about getting an idea for a company together, and then developing it.
On first glance, it sounds like a counterintuitive plan; imagine showing up with an application for a regular startup accelerator without an idea. But EF really wants to find the right person before the right idea.
With a stipend of about £1,200 a month, participants have three months to find and team up with a co-founder to formulate an idea, at which point EF will back the freshly-born startup. The program takes on 100 participants at a time.
“We’ll work with you very intensively to support you to find the right co-founder, pick the right idea, develop the product, get it into market and then ultimately at the end of six months raise funding from external investors,” said Matt.
Essentially, EF pays people for three months to figure out if they would like to be an entrepreneur or if they have what it takes.
EF is trying to inspire an attitude change in how Europe’s best and brightest view startups as a career choice. Unlike Silicon Valley, the culture of young people and graduates founding startups isn’t as strong in Europe, according to Clifford.
“In Silicon Valley, for a long time there has been almost a default path that if you’re really smart, ambitious and really talented then you’ll try and start a startup. In London and probably Europe more generally for a long time the default path [was] you should go into financial services,” he said.
To bring about this change, EF has to seek out the talent rather than the other way around. By working with academia, EF approaches almost half of its participants with a full-time team of six working on this outreach.
“We see about 6,000 candidates a year, and over half of those we’ll have approached directly in the first instance rather than them approaching us.”
It’s a gamble for EF, but Clifford explained that about 75% of participants conjure up a startup after three months.
“It’s absolutely not for everyone. The reason we pay a stipend is we want to take the financial risk out of trying to discover whether or not this might be for you,” he said. “At the end of the six months, when we have our demo day, we typically expect that to be somewhere in the region of two-thirds of the startups, so 30 companies if we’re taking a hundred individuals.”
Over the last four years, EF has worked with and invested in 75 startups and some of these nascent companies have already started to raise external funding and generate some buzz.
“Even in the most recent cohorts, which are still quite young companies there are some that are starting to attract attention,” said Clifford. “Companies like Magic Pony Technology, which is arguably one of the most exciting AI startups in London and Europe that’s not yet been snapped up by a big boy. They do artificial intelligence for video and that’s going extremely well.”
Another one of EF’s more seasoned startups is Adbrain, which specialises in data intelligence for marketers and raised $7.5 million in a Series B round in February from Cisco Investments, Notion Capital and Octopus Ventures.
Beyond London and the future
While it has been very much focused on the early stages of a company and getting them off the ground, Entrepreneur First now plans to continue backing these companies with a £40 million fund to invest in subsequent rounds of EF companies and “kickstart their seed rounds, and then continue to back them in the A round,” explained Clifford.
“We’re very excited about that. It’s not closed yet but we’re confident that it will be in the next couple of months.”
EF believes it has a proven model that it now wants to export. London has been a solid base for Europe and while the first thought may be to move into the US, Clifford states that this doesn’t quite fit the Entrepreneur First ethos as startup career paths are so ingrained there.
Rather, Clifford and Bentinck have looked even further afield at countries with emerging and maturing startups ecosystems, and are launching the EF model in Singapore this September with most of the places already filled.
“What we were very excited about was the opportunity in Asia. We had been building a relationship with various funds and agencies in Singapore,” said Clifford. “We’ve been blown away by the quality of the talent.”
The Singaporean government’s Infocomm Investments agency has partnered with EF for the venture and is already an investor in the British company.
Whether it’s in London or Singapore, EF plans to play a key role in its companies’ futures well beyond creation and seed stage. And we’ll be watching them.