Why I got kicked out of Seedcamp 2009
blog.crowdstorm.co.uk
blog.crowdstorm.co.uk
"It’s worth pointing out also that the slight ambiguity of past Seedcamp years has now gone. Seedcamp T&Cs now state that a startup cannot go into the programme unless they will take the investment offered. To remind you, that’s 5-10% equity (stakes are flexible) for a 50,000 Euro investment. That’s totally fine. They’ve assembled an awesome network of mentors. It would be a huge waste of everyone’s time if a startup got all that great advice and then effectively threw it back in the faces of the organisers and didn’t take the investment."
WTF?
I read that as saying teams have to take investment if offered? Is that even legal? But why should "I just decided not to take investment" be " throwing it back in the faces of the organizers"?
Shouldn't each party enter a transaction because they think it is a good thing at the point of transacting? This looks like it is possible for a team to be saddled with investors they don't like.
( I could be completely off base. Please correct me. Thanks in advance)
"It is important that if you decide to accept the invitation for Seedcamp Week, that you participate with the intention to accept a Seedcamp investment. We have streamlined this week and process to help entrepreneurs and speed up a historically unnecessarily lengthy investment process. As such we believe teams should provide the same good faith and participate with the intention of bringing Seedcamp on board as an investor."
but actually 5-10% stake and upper limit of 50000 should leave quite a bit of wiggle room...
That's also to the investors advantage, so to see a clause like this is a big red flag.
What if you really don't connect on any level and they still want a part of your company ? What if you feel you simply can not trust them ?
Better to have no deal than a bad one any day.
But, they are logical IMHO. You get about 25 hours worth of advice from Saul's high-value network of entrepreneurs and investors. In exchange for this advice, Seedcamp gets an option to invest at a reasonable valuation given the stage of the companies that attend.
Rather than make this option a legal Security in your company, they take you at your word. Seems better than wasting everyone's time with legal fees to actually formalize this option.
Is Saul's post true? Where's the ambiguity?
there have been huge strides in the Uk scene since I left in '07 and it saddens me to see something like this happen.
I think the confusion is over what the last seedcamp day is about, it isnt demo day, it is the interview process, seedcamp have just made the interview process more transparent and open to help others and not just the teams that get funded, which has obviously introduced some confusion.
Seedcamp holds 2 more open demo days along the same lines of YC, one at the middle and one at the end of the cycle
so you're saying that there's no selection process before the companies stand up and pitch on this day? so then, in theory, anyone who wants to do a startup could turn up and pitch? unless that's the case, then the comparison to yc doesn't stand up.
I dont see how any can demand to be a part of seedcamps (or ycs) selection process.
Clean, simple, no misalignment.
It seems that Seedcamp is goofy by front loading the deliverables but won't commit to the investment. That's awkward for the mentors and the companies that are accepted/obliged to take whatever deal is given to them.
That feels like a poor place to negotiate vaulation from, and a major misalignment for the non-investing mentors.
That's why there are lots of networking and mentoring events (local Mini-Seedcamps, Seedcamp week) up front that many dozens of teams profit from, even though only 5-7 receive an investment.
I'm sure the selected teams aren't actually legally obliged to take whatever deal is offered, at least it wasn't at all that way for us last year.
Can someone confirm this? It seems as if this is a recent change.
It's ok for them to strongly warn you that you shouldn't approach them if you are not interested in taking their money. Why waste their time?
On the other hand, cold feet is always acceptable.
It's called a covenant of good faith.
If some startup founders rejected 50,000 Euros and great advisers, for a 5-10% share , there is something broken in the model. At least from the pov of the (vetted, chosen) people doing the rejecting if 50,000 Euros is not providing enough value they ae well within their rights to reject it.
Fixing the broken parts may pay off more than making arbitrary rules that people have to accept whoever puts up 50k Euros. This is like saying people have to accept jobs because "we put so much effort into interviewing you". Such rules are probably unenforceable anyway and make the proposers look like idiots.
My (simple) point is that people should be able to sign or not as they please, without psychlogical pressure to do so.
If people back off, figure out why and fix it vs "changing the rules this year" or whatever)
There are multiple other pitches (at the start of Seedcamp week, at investor day in December, etc) that are meant for a more public audience.
From a startup point of view it is reasonably serious but for a single investor 50K is small, very small.
If a fund had an entry ticket that low I would definitely look elsewhere, I would be very worried about small time investors coming on board with very little experience and a risk profile that does not belong in the venture capital world, especially not the seed world.
If it was operated by large investments by a small number of VC's, the model could provide problematic signals. Specifically, if those VC's get early and in-depth looks at these companies and choose NOT to invest, it would be a negative signal to other investors. By spreading this across a large number of VC's, this potential is diluted.
The investors in Seedcamp are well known and respected investors... they're not "small time" with "very little experience". And many of them are long-time seed investors.
http://blog.seedcamp.com/2009/09/awaiting-moderation.html
Is it possible that Reshma said what she did as a quick shorthand for letting people in? If she knew all the mentors from 2009 (which I understand wasn't you this year), the only other people allowed in were investors.
In other words, she didn't recognize you as a mentor, so asked if you were an investor (the only other group allowed in). And for people she didn't recognize, she provided a sensible shorthand answer for why they couldn't attend. If you're trying to keep the trains run on time, you don't necessarily have the opportunity for a more complete Q&A.
I don't really have a stake in this argument, but just really like what Saul and Reshma have done with Seedcamp.
It feels to me that there is something strangely self serving about this whole 'debate'.
Seedcamp was great and has done a huge amount to catalyse an early stage ecosystem across Europe. It takes a huge amount of energy to put something like that together. I think Reshma should get some slack here.
Someone got the hump because they were somewhere they shoudln't be then bleats bitterly about it and says their rules should change. If people feel that strongly about it, go and do your own thing and make up your own rules. The entrepreneurial community as a whole should benefit as a result.
As a small note, I'm a serial entrepreneur with successful exits and an avid advisor, mentor, and investor in a range of UK startups.
I stand by my point that if you feel this is so wrong, and are no doubt an accomplished entrepreneur, then set up an alternative. I would be equally happy to support yours, or other quality activities that support the growth of the entrepreneurial ecosystem. http://thebln.com By making this such an issue, you run the risk of alienating some of the people and organisations that would be inclined to help.
£50,000!? Can anyone else confirm this?
and while I am at it they dont pay for "exclusive access" to the startups plans either, there is an entire week at which you can ask the startup any questions you like.
whether having an open or closed investor day is the best solution I certainly dont know, but I am pretty sure the motives arent as insidious as implied
its like complaining that I wasnt allowed in the room when pg / jessica interviewed and decided on the yc teams, there are 2 other events much more along the lines of demo day later on.
What if pg/jessica had allowed a bunch of people to sit through interviews? Then, some administrative staff decides to kick out one guy.
That would be a more accurate description from what I read here(based on the OP + Seedcamp's response).
Philosophicals--like whether investors should be in the room or not--are totally irrelavant here. What matters is what was promised and whether Seedcamp broke that promise for one individual(for whatever reason).
It seems like Seedcamp has too many cooks in the kitchen. The whole idea of having "official" mentors seems to have backfired here. You have a mentor complaining that investors are treated better than them. The solution to that is to get rid of this whole "mentor" label.
You never hear much about weekly YC speakers. That YC keeps it a low key affair is telling I think.
since the format is more formal than a sit down interview I imagine they didnt want to disrupt a team half way through a presentation to ask someone to leave.
It sounds from Saul's post that this is part of the package for mentors and that Seedcamp was on the wrong.
Source: http://blog.seedcamp.com/2009/09/and-winners-areseedcamp-con...
Thank you for clarification.
"One quick factual point – of course mentors are able to attend the judging sessions, several did this year and have done every year. I think what happened yesterday was a pretty innocent misunderstanding – you came into the room mid-pitch and as you’d not been a mentor during the week, I guess that’s why Reshma asked very politely for you to not join the session."
which Philip Wilkinson then disputes:
"Reshma outright told me that I had to leave the judging session as I had not put money into seedcamp, as had all the others sitting in that room. She asked me to leave before the next pitch began too. Mentors were not allowed in full stop."
What seems somewhat unclear is whether Wilkinson was a mentor or not.
The issue he raises, i.e. that the investors in Seedcamp are the ones choosing the winners on the final day of Seedcamp week, seems a fair arrangement: these investors have invested money in Seedcamp to provide capital for the winning startups. Hence they should have an input on where their money goes.
Note that investors do not pay to have exclusive access to Seedcamp companies on the final day. Seedcamp does not sell its services as a "gatekeeper". Instead, the investors have put equity into Seedcamp and Seedcamp invests in the winning startups. The amounts invested in Seedcamp are about 50K for individuals and 200K for institutions. Everyone is free to invest in Seedcamp (he should talk to them!).
Saul's point that the final day is closed except for the investors and invited mentors/advisers makes sense to me. It's a special day where the winners of Seedcamp are chosen, i.e. Seedcamp makes its investment decision. This needs to be a small session and behind closed doors.
Finally, any mentor or investor is absolutely free to invest in any company accepted to Seedcamp week or part of the final 6 - or indeed those that have been rejected by Seedcamp. You can invest before, during or after Seedcamp week. Everyone is totally free to choose where to put their money. The one exception is that as part of the selection process, Seedcamp does not want companies in Seedcamp week that already know they don't want investment from Seedcamp. Seems sensible.
So I guess this whole thing was just somehow handled badly or he was invited on another day and it wasn't really clear when that was. I am sure no one meant to "kick him out of Seedcamp". Part of the reason Seedcamp thrives is that there is this awesome network of mentors and advisers who aren't investors in Seedcamp and see the non-financial benefit of donating their time - for the ecosystem, for karma, for encouraging entrepreneurs, for improving startups. This is a completely voluntary process and mentors do it because it's fun. I think startups can benefit immensely from the advice, but I also find it hard to believe that any individual advice from a mentor can be measured in a potential equity return to Seedcamp and the Seedcamp investors down the road. The companies that deal best with mentors' advice are the ones that would probably have been successful anyway.
Disclaimer: I unfortunately wasn't at Seedcamp this year, so I also wasn't in the room when this happened. My employer, Atlas Venture, is an investor at Seedcamp. Usual disclaimer on personal opinion and the like.
Firstly, I don’t see why mentors are invited at all.
Most to all of the mentors have a vested interest in the startup community thriving, lawyers, marketers, investors and angels who were not part of the main fund but still get direct access to the startup, a phone call isnt going to help until you figure out who you are calling, thats where seedcamp and such events help
From: http://blog.seedcamp.com/2009/09/awaiting-moderation.html
"One quick factual point – of course mentors are able to attend the judging sessions, several did this year and have done every year. I think what happened yesterday was a pretty innocent misunderstanding – you came into the room mid-pitch and as you’d not been a mentor during the week, I guess that’s why Reshma asked very politely for you to not join the session."