Sramana Mitra: Let’s talk about your definition of seed. What do you like to invest in stage-wise? I’ll pre-qualify that question by giving you some context. At least in Silicon Valley, seed has fragmented into pre-seed, seed, post-seed, pre-Series A, small Series A, and then the traditional Series A. How does it look like from your point of view and the European landscape?
Spencer Crawley: This week, I’ve heard seed two, mango seed, seed extensions. The semantics have gotten imaginative. I think for us, we set up the fund to be deliberately opportunistic. By that I mean we invest in the best founders anywhere, whilst having and holding deep thesis across a number of areas. We really wanted to be able to be agile and back founders wherever we see them.
In terms of stage, we have invested at pre-product stage in founders who we either knew and had an information advantage or were blown away by. Some of those valuations are high because of the founders having successful backgrounds. By high, I’m thinking $15 million to $20 million range. We have seen some of those.
Those are repeat entrepreneurs who have an impressive track record. There’s a clear understanding of why they’re going after that particular space and why their skillset might be suited to building a really giant business. We’ve invested in rounds where we’re the first money into the business in a much lower valuation. That stretched to businesses that have been going on for some time.
An announcement that we made just two weeks ago was in a business called Futrli. When we met Hannah, the founder, she was already at a £2 million ARR. She had a reasonably large team and had bootstrapped the business to date. There is a range that we’ve done. I think we avoid getting into full-blown Series A. We’re a decent-sized fund for a seed fund but in the scheme of global venture funds, we’re small. We avoid A rounds in general but we have done the odd very early A. Otherwise, seed for us can mean any of the tags that you and I just rattled off before.
Sramana Mitra: What sized checks do you like to write?
Spencer Crawley: We’re gravitating around the million dollar mark. We’ve written larger tickets. Our largest ticket was £1.5 million. We have gone down to tickets of $250,000, but we tend to do those less frequently now. We did one or two in the early days of the fund when we were finding our feet and our voice as a fund. Unless it’s irresistible, we’re unlikely to do tickets below $500,000. We put most of our efforts into writing the million dollar tickets.
Sramana Mitra: Terrific. Let’s talk about geography. You said pan-European and also a third of the fund is allocated for American deals. I’d like to parse that. Would you invest anywhere in Europe?
Spencer Crawley: Yes. We very much see ourselves as pan-European and we’ve made investments in companies that are based in Paris, Porto, Warsaw, Berlin. We’re actively looking at a business in Stockholm. We have a good range of strong relationships with some of the top founders but also angels and VCs in some of key geographies across Europe.
Our view there is that, in general, we will be looking at European businesses that have a continental ambition. Even in larger markets such as France and Germany, we tend to back businesses that want to scale across different geographies. We think we can help any European business with a layer of connectivity and support. We have a team that’s on the larger size of seed but that is to help us cover the ground effectively and leverage relationships with some of the key players in those respective geographies.