Stripe, There haven’t been that many significant innovations in venture capital — despite what VCs might tell you — but, arguably, Entrepreneur First (E.F) is one of them.
While most accelerators and company builders start with ideas, EF started with people. Its programme brings together founders looking to start something with potential cofounders in a way that’s something akin to Love Island. It was a completely new approach to building companies in Europe when it launched 10 years ago — and the first cohort brought investors 17 times their money.
So it’s no wonder VCs are long on EF.
Today, EF is announcing a $158m Series C round to continue doing what it’s doing — and it’s attracted an all-star cast of backers. Amongst them are Stripe founders Patrick and John Collison; Monzo co-founder Tom Blomfield; Wise co-founder Taavet Hinrikus; LinkedIn founder Reid Hoffman; Sarah Leary, co-founder of Nextdoor; and Demis Hassabis and Mustafa Suleyman, cofounders of DeepMind.
Hundreds of people around the world join EF cohorts every year, and spend six months testing out company ideas and potential cofounders, and then developing their companies before pitching to investors. 80% of them find a cofounder.
626 companies have now been created through EF — and 450 of them are still going. Together, they’re now worth more than $10bn; alumni include finance management app Cleo, remote work platform Omnipresent and computer vision business Tractable.
Sifted spoke to co-founder Alice Bentinck to find out what EF’s got up its sleeves for its second decade.
The rush to pre-seed
When EF began, most VCs thought the idea of backing someone who didn’t have a cofounder or an idea was nuts, says Bentinck.
Now, investing pre-seed — when a company is often at that “idea stage” — is all the rage. “In the last couple of years we’ve seen a big rush to pre-seed as prices at seed got inflated,” says Bentinck. “Lots of investors have gone upstream” — although, she adds, as valuations cool, that might soon change.
EF now has competitors too, though Bentinck says diplomatically that “other talent investors trying to do something similar expand the market”. The most notable competitor is Antler, founded in 2017, which runs programmes in seven cities in Europe and many more around the world.
The startups
As for the kinds of startups formed at EF, they tend to shift with the flavour of the year because, as Bentinck puts it, “we invest in what talent wants to work on”. This year that is, of course, Web3.
Other areas of focus include deep-tech, consumer tech and wet bio. By “wet bio” she means startups, for example, creating plants that can remove pollutants from the air or make “clean” meat.