Company builder Entrepreneur First raises $12.4M led by Greylock, Reid Hoffman joins board


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Nicely, that is fairly a coup. Entrepreneur First (EF), the London-headquartered firm builder that invests in people “pre-team, pre-idea” to assist create new know-how startups, has raised $12.four million in new funding led by Silicon Valley’s Greylock Companions.

The funding additionally sees Greylock companion and co-founder of LinkedIn Reid Hoffman be a part of the board. In a name, Hoffman described EF as an incubation mannequin that “contradicts widespread knowledge,” and precisely the kind of concept he seeks to again.

Different buyers becoming a member of the spherical embrace Mosaic Ventures (I perceive Mosaic’s Toby Coppel first launched Hoffman to EF), Founders Fund, Lakestar Capital and Deep Thoughts founders Demis Hassabis and Mustafa Suleyman.

Notable is that a lot of EF alumni are additionally investing. They're Rob Bishop and Zehan Wang of Magic Pony Know-how — the AI startup sold to Twitter for a reported $150 million and the corporate builder’s solely financially vital exit up to now — and Bryan Baum, who co-founded Symbolize, which was sold for a reported $100 million however went via this system earlier than EF insisted on taking a stake within the corporations it helps create.

It also needs to be famous that the brand new funding spherical is for operational prices and to additional scale the EF program. In different phrases, it's solely separate from the corporate builder’s funding fund from which it immediately invests within the founders and startups it helps create. Subsequently, that is extra akin to EF as a startup in its personal proper elevating funding.

The power to create a portfolio of nice entrepreneurship and nice corporations is one thing I deal with as a private mission

— Reid Hoffman

Based again in 2011 by Alice Bentinck and Matt Clifford, EF payments itself as a “expertise first” investor that targets the most effective technical and area expertise in Europe and Singapore — each current graduates and in addition individuals already working at tech corporations — and invitations them to use to its six-month program the place they discover co-founders and in flip discovered startups.

The EF program consists of monetary help within the type of a month-to-month stipend for dwelling prices whereas founders discover their co-founders and determine on an concept. That is then adopted by pre-seed funding, along with workplace area, authorized and administrative help and mentoring and recommendation from the EF group and exterior entrepreneurs from the broader U.Okay. and Singapore startup scene. There’s additionally a separate follow-on fund to co-invest in alumni corporations on the seed and Collection A stage.

The thought is to assist gifted people turn into entrepreneurs, and corporations be based, that in any other case won't. So far, EF says it has helped greater than 500 people on its program, who've constructed greater than 100 corporations with a complete (totally on paper) valuation exceeding $1 billion.

“Despite the fact that I don’t like to take a position outdoors of Silicon Valley, the power to create a portfolio of nice entrepreneurship and nice corporations is one thing I deal with as a private mission,” Hoffman tells me, noting that Bentinck and Clifford have created a “nice mannequin for creating new, deep tech corporations on an incubation foundation.”

“I feel the place it’s useful is when you will have depth of tech expertise, creativity, an curiosity in creating corporations however an as but solely partially developed entrepreneurial tradition,” he says when requested why a mannequin like EF is required outdoors Silicon Valley. (Individually, Clifford tells me EF has no plans to broaden to the U.S.)

I recount how in EF’s early days — albeit earlier than it was something like confirmed — numerous VCs I spoke to had doubts the corporate builder’s “pre-team, pre-idea” mannequin might work. Hoffman sounds unsurprised.

“The variety of incubators and accelerators which have failed is large,” he says, “so what occurs is that the majority VCs are typically ‘look, the actual entrepreneurs are simply prepared to go and do it themselves,’ and I might say that's widespread sense knowledge. Widespread sense knowledge has a breadth of fact to it, [but] I like to take a look at the place the widespread sense knowledge has a limitation and the place there's a huge alternative.”

Hoffman says he can simply see “a universe during which there’s 20 or 30 or 40 cities, perhaps even 50, the place Entrepreneur First is integral to making a set of fascinating tech corporations in these areas.” “You'll be able to attain scale should you get the method proper,” he argues, pointing to how Silicon Valley’s Y Combinator has grown within the final decade.

So why hasn’t anybody cloned EF’s mannequin verbatim? Clifford says it’s partly community results — a program like EF turns into extra priceless the extra high quality founders and corporations it provides — and while Reid doesn’t dispute this, the reply could also be even easier.

“The rationale why they haven’t been copied but is that folks don’t have a full recognition of the actually fascinating factor that Entrepreneur First is doing,” he says. “And naturally they attempt to hold a few of the secret sauce underneath the covers, too.”

Earlier than I wrap up our name, I flip the topic to the thorny situation of Brexit. Provided that a big a part of EF’s present program takes place in London however attracts candidates from throughout Europe, was the U.Okay.’s choice to vote to go away the EU a consideration earlier than Greylock determined to take a position?

“I undoubtedly considered it,” says Hoffman. “The influence will I feel be comparatively harsh over the subsequent 5 or 10 years, beginning with the truth that I feel individuals are underneath the phantasm that there's a simple divorce from the EU.”

With that stated — and factoring in that we don’t but know what a post-Brexit world will appear to be — he reckons there’s nonetheless “simply sufficient headroom” within the U.Okay. to create world reworking corporations.