
A venture capital firm says it invests in people “pre-idea, pre-team” - kixa
http://blogs.wsj.com/digits/2015/06/12/no-team-no-idea-no-problem-this-vc-will-fund-your-startup-anyway/
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davidhunter
EF solves a real problem in the UK.

Our universities don't exhibit anywhere near the same 'entrepreneurial
culture' vs the US equivalents (although this is slowly improving -
thankfully). We also don't have the big tech companies (google/fb etc) with
the means to compete with banks/hedge-funds for the highest quality
engineers/PMs. In the US, these institutions serve as natural breeding grounds
for startups. Without these environments, it becomes much more difficult to
find like-minded people to develop ideas and raises the time/cost associated
with doing so.

I joined EF on the current cohort for this reason and have been surprised (to
the upside) with my fellow cohort members. They have managed to recruit some
exceptionally talented and motivated people who would be difficult to find
otherwise. Also, apart from the cash investment (which just serves to pay your
living costs), they have a great network of industry contacts, alumni and
investors.

The jury is out on whether the EF model will succeed in producing valuable
companies. However, given the level of technical talent it is attracting, they
are definitely solving a real problem and I believe it will outperform the YC-
style accelerators who have been struggling in Europe. Hopefully they will
open the investment fund up to alumni in the near future :)

Message me if you have any questions - would be happy to answer.

~~~
aaggarwal
So, in a nutshell, EF is trying to recruit people from different areas who
wants to be entrepreneurs, but doesn't have an idea/team, and EF will create
suitable teams out of these people and give them money to build some product?

I have a question. Who exactly will decide what the product would be?Is this
something those people would decide among themselves, or the EF would put them
on a particular project idea they think is suitable for that team?

~~~
davidhunter
You have complete freedom over who you work with and what you work on. They
fund you unconditionally for the first three months and you can walk away at
any time if you want to.

Their website is actually pretty informative: [http://www.joinef.com/our-
programme/](http://www.joinef.com/our-programme/)

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tinkerrr
> 10% of applicants are accepted after multiple rounds of interviews and even
> a logics and computing test.

It's interesting to note that they are trying to hire entrepreneurs the same
way Google was trying to hire programmers 10 years ago.

~~~
mathattack
It's actually moderately appropriate here if they're "drafting" out of school.
(Potential versus having real work to show)

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M8
_The 30-year-old with a PhD in neuroscience from Cambridge University plans to
set his “media-truth-detector” loose on what he calls Russian propaganda,
mostly against his native Ukraine._

Unfeasible and uninvestable, but good if you want to get an EU grant I guess.
Who is even the target market? Meanwhile just follow all russian, ukrainian
and western media sources and compare them.

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foldr
This reads like an Onion headline.

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sorenbs
I'm at month 3 of the EF process. Happy to answer any questions :-)

~~~
bengali3
> _pre-idea, pre-team_

Assuming this was true for you? do you have an idea & team now? How long were
you funded/hired without these two in place? Theoretically how long can one
last in the program if you dont find these 2?

How long have you been burning their cash, have you raised other funds? You
could be considered an even Riskier (debatable) investment than the alternate
of an actual startup with an MVP actively looking for funding, so does their
percentage reflect that? Did you pay an entrance fee as well?

Thanks!

~~~
graphene
They fund individuals for a fixed, three month period, during which you are
free to work on whatever and with whomever you want.

After three months, they invest £10000 (in exchange for 8% equity) in all
teams that are settled on an idea and seem promising.

There are no fees of any kind.

(disclosure: I'm on the current cohort)

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7Figures2Commas
> “We are probably the most risk-seeking investors in the world,” said Matt
> Clifford, EF’s co-founder.

This is a great quote, but the reality is more like: "If we didn't start a
firm that invests in companies before they exist, we wouldn't have any
dealflow."

> Despite the risk-–30% of the entrepreneurs EF funds drop out without ever
> creating a company –Clifford said he has no difficulty finding investors for
> his venture firm.

Most prospective LPs can't get into top funds, but in markets like the one we
have today, they don't go home. They funnel their money into second, third and
fourth-tier funds. There were a lot of these in the first .com boom.

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snorkel
Similar to sports agency and drafting young athletes. Will tech hiring become
televised events with sideline commentary?

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devanti
So they give you a couple grand. What other value do they provide? Seems like
a bad deal for people who actually have good ideas and can execute.

~~~
gearhart
I've never been through the programme, but I've worked with several people who
have.

Most young entrepreneurs who "go it alone" tend to pick up a network of useful
contacts - advisors, introducers, investors, corporate buyers, talented
potential co-founders/employees etc - over a period of a few years. EF are
very good at speeding up that process, so when you're starting your first
company you've already got a base of people around you who can provide you
with the support and connection you need, without you devoting large portions
of your time to it.

It's easy for young entrepreneurs to downplay the importance of that network
because there's a selection bias towards confident naivety amongst people
who've decided to set up their own company rather than following a safer, more
established path (I know I did when I first started), but looking back on it,
objectively I'd say joining them is a good idea for almost any graduate
entrepreneur.

Having someone who, without any real effort from you, can represent you to a
VC from a position of power, make warm introductions to large numbers of
angels in your domain, find you really good candidates for early-stage roles
in your company, or introduce you to people in big companies who're actively
looking to buy products from startups is a blessing you can almost overlook if
you've got it but helps you avoid some serious pitfalls.

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TimPC
There is such a thing as too early. The valuation for the 8% equity here
really bites.. you're getting smaller investment than a top tier accelerator
and you're going through that 'accelerator' at such an early point in the
product that your next step is likely another accelerator. I get that these
programs can have value, but the likely outcome is messing up your cap table.
It also is a bit awkward to start a start-up when your personal finances don't
give you months of living expenses -- this seems like a recipe for large # of
failures and taking bad money when you're too early for good money.

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bergmann
£10k for an 8% equity stake, how does this compare to other funding in London?
The article mentions the "Founder Institute" provides £1k for 3.5%.

~~~
dheera
Doesn't YC give 120K for 7%? An incubator/accelerator that isn't as good as YC
(and therefore has less to offer) should have a better deal than that to make
up for the difference. Given YC as a baseline, an investment of 10K GBP ==
15488 USD should be taking _less than_ 0.9% of the company.

~~~
smeyer
>An incubator/accelerator that isn't as good as YC should have a better deal
than that to make up for the difference

Only from the perspective of someone being recruited by both YC and the
alternative. If YC isn't an option (as it isn't for most people), then it
doesn't much matter whether or not YC is offering a better deal to someone
else.

~~~
mcguire
And at some point your only option is Vinny, who hangs out all day at the bar
over on 4th. His deals can be...problematic, but he'll give them to anyone.

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solve
MOST accelerators will outright reject, if not make the barrier to acceptance
vastly higher for any company that went through a "pre-accelerator". Being in
a pre-accelerator makes it far harder to get into an accelerator. So pre-
accelerator is really a misleading name.

But change the name of these organizations to "VC firms" or "angel groups" \-
much better description.

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eculic17
don't understand why they keep saying it's a VC in the article. It's a startup
accelerator

~~~
jklein11
Because outside of the HN bubble an accelerator is the pedal next to the brake
in a car.

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tkiley
Sounds like they are trying to manufacture startups like Lou Pearlman
manufactured musical acts.

I doubt there will be a tech startup equivalent of the Backstreet Boys,
though.

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troels
Isn't that just an entrepreneur-in-residence?

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pizu
also, "pre-birth" and "pre-kindergarten"

~~~
michaelochurch
Well, over 90% of getting funded by VCs is stuff that happens before birth, so
yes, that is literally true.

~~~
throwaway435231
Michael, what you've just written is a gratuitously negative comment[1] that
adds nothing. Guess what, 99.999% of getting funded happened in Earth's
prehistory of 4.5 billion years, at any point during which things could have
gone differently and precluded humanity and culture. Out of the remaining
0.001% - 45,000 years - scarcely ten thousand consisted of the establishment
of western civilization and only the scant past few decades have established
an Internet and a culture where literally anyone in the western world with an
idea can start making it a reality, on a physical (if not cultural) level -
i.e. physically nothing is required that the average person cannot access.
Physically you do not need access to anything except knowledge and culture,
which are actively working to take away. You are stealing.

The way to expand this opportunity is not to focus on the first 99.99999% of
history, but the next ten years. You add nothing and take significant amounts
away from that. I'm sick of your negativity. Here's a fact: I'm not asian, but
asians are far more likely to get funded. SO WHAT! How does that change
whether _I 'm_ taking the time to build something?

Michael go build something. Anyone can call people names. People should
downvote your negative comments on sight. Besides being policy here, anyone
who is downvoting you is literally creating good in the world. Because you are
actively preventing the expansion of a culture of building. We might not have
the power to get a sixty year old who had to go work early in life and
received no formal education funded, regardless of this person's merits or
ideas. But we can - and should, are required to - downvote you, and contribute
to a positive culture where in five years, when that person is sixty-five, and
has spent the past five years building something, he can be.

 _[1] the definition of which is that it is not new, not useful, not
insightful, and adds absolutely nothing while being negative. Similar to if
you said to a commenter: "by the way YOU SUCK at every skill, when compared to
Mozart at music". This is undeniably true, he started at the age of four and
specialized very hard. It is a comment nobody would disagree with on a literal
level. It is also an absolutely worthless comment that adds nothing: the only
reason anyone would write it is so that they could say the word "YOU SUCK" and
then weasel out of it. Of course you should get downvoted, so hard you delete
your comments which add nothing. Go build something, Michael._

~~~
discardorama
Using a throwaway account to attack someone is not cool. If you have the balls
(or the equivalent for the other gender), stand up and make the comment in
your own name.

~~~
throwaway435232
(same user, I lost the pwd). I wouldn't touch Michael's negative comments, nor
do I want to prop up criticism with a username. he needs to just stop posting
gratuitously negative thing about startups (most of what moves him to
comment), which are not constructive, and it's up to the rest of us to
downvote gratuitously negative things until he learns that this is not the
forum for them, unless he starts phrasing them constructively. the other
respondent already tried to make this about me ("Until you're a successful
founder from a bad family background and no history of founding startups, no
ivy league education"...) so I am glad that I didn't get into this under a
normal account. this does not seem like a productive thread.

~~~
Phlarp
Notice how other people in this thread can level criticisms at both the topic
of discussion and towards one another while flying their own handle?

Notice how you cannot do this?

~~~
throwaway435232
given that my main point is that this level of discourse is totally
inappropriate for hackernews, there is no reason I would engage in this. it's
like feeding a troll. if there were something substantial to discuss, that
would be a different story.

