Yesterday I got kicked out of seedcamp 2009!
Aside from the embarrassment caused by the mismanagement of the situation, and the degrading scene created by being asked to leave in front of a room full of investors I consider friends & colleagues, I now find myself thinking about the entire Seedcamp concept.
Why was I asked to leave? Well apparently, I wasn’t an investor in the seedcamp main fund and thus not allowed to participate. What I hadn’t seemed to realise (and I’m sure I’m not the only one), is that this fourth day is where angel funds and VC’s pay upwards of £50,000 to attend (no kidding!), to get exclusive access to the company pitches and detailed business models and plans. Not only that, but these start-ups have at this point benefited from lots of mentoring advice from kind souls who attended the previous days to help. Now of course if I’d paid for an event and someone got in for free, I’d be annoyed to. It’s not that I’m objecting too, but rather a lot of confusion over what Seedcamp claims to be. The real question is how it can be trying to be both an open eco-system and a closed investment fund at the same time.
Firstly, don’t get me wrong, seedcamp gets some great investors and Saul and team have done more than most to promote the startup scene, and I have a lot of time and respect for them. It’s just that in this particular instance, I’m not sure the Seedcamp format is right or that it really knows what it wants to be. It pitches itself as “providing access to seed funding but also, more importantly, will expose startups to the collective experience of people who can help inspire Europe’s next generation of technology entrepreneurs.”. I believe healthy debate should be invited to see how things can be improved.
- The first day of Seedcamp sees 20 companies presenting their concepts / business in raw unedited format to anyone who wants to see it.
- What follows over the next two days is a series of sessions and help from mentors gathered from the great and good across the EU tech scene. The mentors give their valuable time (completely free) to provide advice, insight and every now and then a little bit of inspiration.
- The last day is the final presentations from the Seedcamp businesses where they pitch their full plan (hopefully having been significantly improved by the advice given) apparently only to Seedcamp fund investors, meaning the mentors and indeed all other attendees are prohibited from attending.
- The winners are then chosen and small amounts of cash invested.
This second to last point is where I believe the concept is flawed, and why there is a lack of transparency about the aims of the project. Why?
- Firstly, I don’t see why mentors are invited at all. They certainly don’t get thanked afterwards by the organisers (I wasn’t last year), and there is definitely an ungracious feeling of being shipped in and out like cattle to advise and help. If the argument is that seedcamp is doing the mentors a favour by giving them access to the startups- then I don’t buy it. I can achieve that quite easily myself with a phone call and a meeting at my office – thanks very much.
- Secondly, what’s with the closed investor day where VC’s pay large 5 figure sums to attend – is this also an investment in the main fund? Arguably, all the mentors have done is directly helped these investors by giving the start-ups valuable advice that then benefits their investment fund. If seedcamp is getting large sums of money for this then you could say that the mentors should be compensated too or not invited at all.
- Thirdly, if it really is purely an investment fund, then there is potential for large conflicts of interest. I did hear a few people say that GigLocator should have won one year but didn’t because one of the investors had a stake in Songkick. Whether this is true or not, it is a valid possibility.
- Having a closed investor day also deprives the companies of an opportunity to present to the widest possible audience and hear the thoughts of other investors and entrepreneurs. Perhaps most significantly deprives Seedcamp the opportunity to broaden their impact. How? Simply put – if any if the businesses were good and didn’t win a small group of external / angel investors could step in with financing, advice or indeed both.
To to really dig deep into the core of this issue, we need to understand who Seedcamp aims to benefit. That is, if its aim is to help the companies – it should be completely open and everyone has a chance to help out, invest, and have full access in a competitive way (perhaps with a first right of refusal given to Seedcamp). If on the other hand its primary purpose is to help Seedcamp investors refine the propositions and get some investment opportunities – then they should remain a completely closed event and Seedcamp should pay any advisors or let them invest at the same time. In either case, it should be much more transparent about what it is trying to do.
At the moment it appears to be firmly stuck in the middle!
