Hi, we're Seedcamp. We've invested in over 170 startups since 2007. Got a question for us? AMA!

What's the typical ratio of really-successful : moderately-successful : failures you see in investment terms? [example: out of every 100 investments into companies, it's typical you see 2 really successful, 80 OK and 18 failure in investments.]

Taylor: It's a good question, but it's hard to define the brackets of success. We've created an infographic that gives you some more details into the Seedcamp family of startups: http://seedcamp.com/seedcamp-in-numbers/

One benchmark for success that a lot of early stage investors use is “follow-on funding” ie. who has raised capital again after we invested. For Seedcamp it's 91%. So based on past performance, if we invest in you, you’re 91% likely to raise further capital, and we continue do our best (for the life of your company) to help you build a great business with that.

What has been so far your most successful investment?

Tom: Since Seedcamp was founded in 2007, we've been fortunate to back a number of really excellent founders who've gone on to build amazing companies. Although its very difficult to define success as an early stage investor, one company that we are very proud to say we were the first investor in is Transferwise who have since gone on to raise funding rounds from some of the most well known investors in the world including Sir Richard Branson and the top-tier VC's such as Andreessen Horowitz, IA Ventures, Valar and Index Ventures.

Have you ever invested in a 1 man/woman company ?

EDIT: Sexism.

We like to invest in a team as it's unusual for a sole founder to have all the skill set required to get a startup off the ground. It's essential for a founder to be a great hustler and story teller, can they convince a second person to leave their job and join them? This already gives credibility to founder. Having said that if a solo founder is exceptional and has a deep knowledge of the sector/industry they are going after then we'll certainly back them. We have done this on numerous occasions in the past.

Hey guys, thanks for spending the time here answering questions. I recently went to your London meet & greet and found it very informative.

I'm currently a solo technical founder. With solo being the issue here for you guys I assume. I've been building a B2B SaaS in my spare time around since around Nov of last year and the back end is already complete. The product is largely based around API/endpoint integration tests from different territories. I'm currently working on the front end applications for iOS / web. So a huge amount of dev work is already complete. I would ask were I to apply today, what would you guys like to see such as, am I currently building a team? What you consider a minimal team consists of given the product? Is this the kind of thing Seedcamp would be interested in getting involved with etc.

Thanks.

Thanks, glad you found the meet and greet useful! To your question, I think what this comes down to is whether the team you are bringing together have the skills required to build, execute and also get the most out of what Seedcamp can offer. Once a company receives investment from Seedcamp they have the opportunity to move onto a increased growth trajectory. But in order to do this they need to have the capacity to be able to make the most of the benefits that being a Seedcamp company brings (e.g: Seedcamp Academy, our Founders Pack, the US trip and the incredible connections that become available through our network of mentors and investors). This is why we look for committed teams with the right mix of skills and why being a solo founder and making the most of all Seedcamp has to offer can be difficult.

When next are you coming to Nigeria and what are the specifics you look for in startups within the African continent (I.e day one revenue, founder-industry clout, etc)?

Carlos: Thank you for reaching out from Nigeria! We've had events in Africa before and hope to do again soon. In terms of what we look for, however, it doesn't really matter where the company is coming, rather we are looking for the same attributes in a startup across the board.. a highly motivated and capable team interested in solving a global-scale problem.

Thanks for doing this. I have 3 questions.

1. With tech products, it is easy to set up an MVP and get a simple version of a product online and working with minimal funding, however, to make the jump from MVP to functioning startup, funding is often necessary. How often do you see teams working on a project part-time, ready to jump if the funding comes?

2. Do you think this is a bad approach? For instance, should founders be totally committed (time wise) before thinking about sourcing investment? I'm totally committed to the product but I need to keep paying my bills with my day job.

3. This is the wrong place to do this, but since we're here and you'll likely see this, I'll be bold - how do you feel about tkt.ninja?

Carlos:

1. See this quite often for the Pre-Seed stage, pretty much not at all at the Seed stage.

2. I think it is 'an' approach, and in the end, any approach that gets you to where you want to go, can't be bad. Once a company takes official investment, though, it is customary for investors to expect the founders to go full time at that point.

3. Think the idea is cool! Actually, we've invested in - https://www.showmango.com

How can a Chinese entrepreneur like me apply for your funds?

Carlos: All founders can apply! No matter where you are from! Just go to our website - http://www.seedcamp.com and find out what kind of funding is best for you Pre-Seed vs. Seed and learn about the best ways to meet us & apply.

What critical element(s) do startups moderately/vastly overestimate their prowess/ability in, irrespective of potential talent and skills?

Carlos: Very good question... It is a difficult one to answer because it is hard to answer it quantitatively. That said, the one thing that almost always catches founders by surprise is the immense challenge that is to keep a founding team together throughout the journey. There are so many cases of founder fallouts that perhaps it is something that founders should talk more about early on: alignment of values, alignment of goals, and what to do (how to resolve things) in case things go wrong.

Taylor: Perhaps less ‘overestimate’ and more ‘learn how important and hard it is’… Most startups eventually find that they need to improve their ability to learn from their users. Early ideas and early adopters are often a good match, but the research and refinement that goes into true product-market fit is a huge amount of effort. Truly understanding your user is a massive competitive advantage, so we do our best to train startups in this area with in-house programs, mentor relationships, and expert speakers on the topic.

In case you want to learn more about us, also make sure to check out our Podcast - http://podcast.seedcamp.com and learn more about what we do here - https://soundcloud.com/seedcamp/reshma-carlos-take-on-what-is-an-acceleration-fund

What is the best way for 'lone wolves' to find others to help them work on their idea? (You said you prefer teams) If I have an idea but no software experts/database engineers/etc. what should I do?

How much value is there in an idea (and how much ownership tends to go to the person with the idea)?

Kirsten: this is a common pain point and we've seen solo founders tackle this in a number of different ways. It all comes down to networking and passion. Attend hackathons, meetups, social events and get the word out there that you're hiring or looking for a tech co-founder. We've also seen several solo founders successfully write great blog posts about their vision, what they've done so far and what they're looking for. In our experience it's important to bring the tech talent in-house. Once you've identified the right person(s) we'd recommend that all the members are equally incentivized.

How many if any invesments have you made on people who approach you directly? How does an entrepeneur with no contacts get investment and do you think that people miss out on investment due to lack of contacts?

Tom: Seedcamp invests at both the pre-seed and seed stage. For our pre-seed strategy we have an open application process where you can apply online (http://seedcamp.com/apply-to-seedcamp/), the next deadline for us to review pre-seed applications is 2 August. As part of the pre-seed application there is a space to include someone that has referred you to Seedcamp but it's not a pre-requisite by any means. For our seed stage strategy we look to invest alongside other investors (top-tier VCs or leading angel investors) but not as a lead investor in such rounds. We look for warm introductions from someone within our wider network to potential seed investments.

Do you invest alongside other accelerators/investor groups?

I'm the co-founder of a B2B SaaS business (www.storegecko.com). We're talking to angels and various other groups who can help us with seed funding.

Do you invest alongside other angels, funds, institutions, and accelerators?

Dave: Yes, we like to invest alongside other investors. Recently we’ve made seed investments alongside funds such as Index Ventures, Connect Ventures, Octopus, Playfair Capital and Andreessen Horowitz. Usually the fund is leading the round but the startup still benefits from all the value-add services and advantages of having Seedcamp as a lifelong invested-partner.

We also engage with a lot of the other accelerators here in the UK and across Europe and have increasingly been partnering with them to co-invest in teams.

We have a number of different funding options tailored to different scenarios. You can find out more on http://seedcamp.com

Do you find more and more that startups are coming to the same ideas/identifying the same gaps in the market and solutions at the same time, with no link between the companies?

Dave: Yes, but I think this is natural. It usually happens because certain technological advancements & trends open up opportunities and people inevitably see it at the same time. eg. high penetration of smartphones, a new device eg. Apple Watch. Then you have new trends such as ‘Airbnb for…’ or ‘Uber for…’ where a new model becomes possible and then it’s applied to many different business areas, problems and industry verticals.

This is why we’re excited when we find a founder that has some sort of unfair advantage (better team, can execute quicker, strong network) a unique insight into a particular market (experience in a niche or specific industry) or has a significant technical expertise.

First Question, please can you pre-seed invest in my one person band mobile app company without seeing any evidence :p

But seriously. We have seen the idea of IoT multiple times in the past. I remember seeing a fridge that would apparently order my milk years ago and it still has never really hit the ground running. Do you think this time round we are likely to see the whole idea really take off or is is still going to have a spike in popularity and die down again?

Tom: First question, sounds great! look forward to reviewing the application :) (http://seedcamp.com/apply-to-seedcamp/) Re: IoT, I think you're right that we've only really started to scratch the surface of what's possible in this space and the market is still developing somewhat. However, certain specific IoT markets are emerging (i.e. connected devices and capturing data is here to stay and is a big future trend) and there’s also increasingly the opportunity to create new markets.

What is your typical outlook on a pre-seed startup for revenue growth? I would love to start a SaaS application that brings in $2-5 million annually with a very small core team to run the business. Is that a typical exit you're looking for?

Carlos: I appreciate the spirit of your question, which is basically a form of 'what traction do we expect to see'.. however not all companies have a revenue growth KPI, particularly if they are a network effect-type company. That said, your ambitions to run a 2-5m run rate company with a small team are applaudable. What would your ambitions be if you were given twice as much money?

Is there a concern in terms of equity if a company comes to seedcamp already having raised some seed funds? With SEIS in the UK there's lots of startups who potentially can have already given away up to 30% before applying. In reality is there a figure in terms of equity already given that puts you off when looking at potential companies?

Carlos: That's a very good question. We try and tackle it here - http://seedcamp.com/resources/investment-are-you-in-danger-of-raising-a-toxic-investment-round/

However, I don't think there is a 'right' number (amount of equity given up) that immediately raises red flags unless it is a huge outlier as described in the blog post. What's more important is how much money was raised to get there, over how many rounds, etc. as the story might be longer and deeper than meets the eye (on a cap table).

What are the qualities you look for in the developer(s) on a founding team. In particular, the non-obvious qualities, and the skills besides programming that make them a good developer?

Carlos: Thanks for this question as we've in the past spoken about the importance of a team. I've tried to answer that question thoroughly here - http://thedrawingboard.me/2011/09/12/how-does-an-investor-evaluate-a-startups-team/

Are you guys playing the long game, swing for the fences (a la YC) or are you looking to invest in base hits (say 8-9 figure exits)?

Carlos: That is an amazing question and one that hits to the roots of what every fund needs to ask itself when starting up. We've taken the view that great founders come from all over the world and that sometimes the 'smaller' ideas in the short term, can turn out to be huge ones in the longer term (have you seen the rejection emails that the AirBnB founder just posted recently? - http://bit.ly/1TzNwKi).

Thus, we are always looking for ideas/founders that are going to become game changers, that have the potential to become Billion dollar companies. However, it isn't always obvious in the short term, and that's part of the challenge and why we really put a lot of stock in finding the right team who will persevere through the early days of ambiguity and skepticism by the broader investor community to really take their idea to the maximum of its potential.

Hi guys,

The spam filter likes to eat posts with shortened URLs in them. Please try to avoid using them if you want your posts to show up without having to wait for you to manually approve them.

thanks for that!

Hi!

Is there any connection between your fund and the Rainbow Gatherings?

Seed Camp is what Rainbow folks call the pre-gathering setup, like diverting some water from a stream for washing/cooking/drinking, building the kitchen, etc.

Thanks for soothing my curiosity!

Dave: no connection, we didn't know anything about Rainbow Gatherings until 4 minutes ago. Amazing.

How do you find people to fund?

How do you end up monetizing startups (i.e. getting money back from them), and what models (if any) do you favor for earning a return on investment?

Surely the business making money (or having the ability to make a profit at some point) is a prerequisite to investment.

Dave: We don't necessarily need to see evidence of revenue/profit when deciding to invest (ie. many of our pre-seed investments are still pre-revenue). But we like to see founders that have a clear idea of what problem they're solving, who for and why it's a valuable problem to solve.

Right, I'm just wondering how/when money goes back to seedcamp. Partial ownership, or is it like a loan that gets paid back, etc.

Some discussion on this topic on Quora: https://www.quora.com/How-do-for-profit-Incubators-make-money

Carlos: Ok.. I understand your question now... basically, we don't charge cash to founders as some programs do as part of the companies being in their program. We 'make' money only when the company exits and our diluted percentage ownership yields a return to us. We don't force exits and we support companies throughout their lifecycle (not just for a limited period of time).

Carlos: Ah.. I see I think I misunderstood your question.

Carlos: Since 2007 we've held events throughout the year for our pre-seed investments. These include our Meet & Greets, Seedcamp Weeks, Mini Seedcamps, etc. For our Seed investments, generally we meet founders through introductions, either from other founders or from investors we trust.

As for 'monetizing a startup'.. not sure I agree with the question itself, as we don't look to create an artificial liquidation event in a startup like that.

Can a single founder currently working somewhere apply? For e.g. I'm working on my idea, which I believe has a tremendous potential, however, I'm an Indian recently transferred to Poland, working in an MNC. New place, new people, I've slowed down really. So is there any way I can contact the 'right' guys(read developers!) through you so that I can at least prepare just enough to be presentable? Also, if selected, will I be able to work from the UK? Do you think getting a Work-Visa might be an issue in this case?

Kirsten: Of course it's a big leap of faith to leave your day job and go into a startup full time. Not everyone has the luxury and financially stability to do this. However, whilst you're not fully committed to the startup it's hard to ask a 3rd party to commit to your vision. We'd therefore recommend you wait until you're a little further down the line before applying as that way you'll be able take full advantage of everything Seedcamp and our programme has to offer.

To answer your next question we're UKTI approved so we can help you with the right candidates with an entrepreneurs VISA.

Would you consider / have you ever accepted companies who have a non-public MVP? We're working on something which we can show for our main seedcamp application next month, but it won't be a public and functioning product ....

Carlos: For sure! Actually, we invested in Mailcloud (https://www.mailcloud.com) at that very stage (non-public MVP). At that stage, however, we want to make sure the founding team is very execution oriented and capable internally, as that will be where we focus on in a pre-launch company.

What are the main differences between Techstars vs Seedcamp?

Carlos: Perhaps its best if we broaden the question to include YC as well. I think there are many great attributes to each of the programs. The people, the locations, and the Alumni, all make each program unique. In many ways, it is like asking what are the differences between top universities globally. In the end, it will come down to personal preferences and whom you click with more and who you think will add most value. I encourage you to research and speak with other founders that have been in the programs to get a feel for the culture internally and whether it is right for you.

What is your opinion on the state of commercial drone businesses? Too early to start? Is the drone space getting too crowded?

When it comes to drones what is something you have yet to see and something you want to see?

Carlos: Drones are awesome (my favorite right now is - https://www.lily.camera). It is clear that they will become part of a city's infrastructure in the near future. Founders such as Jay Bregman (ecourier, Halo) are starting to tackle the commercial drone business, so I expect that the time is right to start really laying the groundwork for many new businesses in the field. Would love to hear what ideas are being worked on!

What are the 3 most important elements you see in startup application to be selected in Seedcamp's Pre-seed ?

Dave: Team, team and team :) But seriously, at this early stage that is by far the most important thing we look for. Do you have experience of or a unique insight into the problem you’re solving? Are you ambitious and passionate about it? Do you have the skills on the team to make it happen?