Will Bennett, Principal at Seedcamp: BREAKING: Seedcamp closed $220M + $100M Funds

0:00Will Bennett:Hello and welcome back to the Scaling Europe show. I'm Sid Johnson. Today I'm joined by Will Bennett. Will is an investor at Seacamp, one of Europe's, if not Europe's leading, incredibly early stage fund. You've got some very exciting news. Yeah, I know. Thanks so much for having us on, firstly. And yeah, announcing our new fund. So Fund7. It's our seventh core fund. And how much is it? Tell me about it. Yeah, so it's seventh core fund. The core fund is$220 million, which is a little more than the last time. And we also are announcing our second select fund. So the select fund is another$100 million, which we'll deploy at kind of Series B onwards.

0:37Will Bennett:The select fund specifically has a kind of US angle. Obviously, more and more of our entrepreneurs being based there from an earlier and earlier point. And with two teammates in the US, we wanted to kind of orient the select fund around that. And so that select fund is for doubling down on the big companies that have done particularly well. Is that right? Exactly. it's for early growth early breakouts in the portfolio where we want to you know be able to support even more than we already do i think a big part of the work we've done during this fund is to kind of build out the talent and customer networks in the u.s um to support with what we had in mind for fund seven and that's still a fund i think i read it it's like series b and beyond exactly is there a limit to how late you'll go do you have like a rough check size what does that look like it's a good question um not not a strict limit um and we can do like multiple rounds of the the same company um you know we would be a follower in those rounds um i think there's always value in having a new lead come onto the cap table so it's designed to complement that and you know do do our pro rata when we're still incredibly excited and the the core fund 220 million the last one i think was three years ago four years ago was 118 million so it's you know 14 million dollars bigger what was the thinking there yeah i mean so keeping a lot of things the same honestly like we're still trying to lead the rounds of the best entrepreneurs in Europe.

1:56Will Bennett:Clearly, there are also certain rounds, the first round, we call it pre-seed inception, whatever, that are a bit bigger than they used to be. We obviously want to be a part of those and write meaningful checks into them. And yeah, hit ownership stakes that can return our fund. I think, you know, every fund is figuring out exactly how to partake in the next capital intensive play, whether it's energy, compute, um space and so on and you know we want to be a part of all those frontier categories so that's a big part of the reasons for a slightly bigger fund and going back to the uh the kind of select fund yes i think i was always being hyper focused on staying at that very very early stage you mentioned before actually that you have actually trialed this model before can you talk about the first time that you kind of launched a select fund and successes failures how you've changed and adjusted it and doubled down yeah look i think we've gone into it with like as much humility as we possibly can um i think it's a model that a lot of funds lead into at some point i think a couple of main areas like we have companies in the past we would have loved to put more institutional capital in i think we've been able to use bbs in the past but we really wanted to double down from seed camp core um so companies like synthasia for example which is in our fourth core fund um you know we continue to want to put more money into that company um so there's there's this that is like a really exciting thing and i think look on the other hand like we have this whole um us platform it makes sense to kind of bring in more capital alongside it i think you know increasingly our core fund is actually defined by that as well um we're making investments at pre-seed where maybe there's one founder in palo alto and one founder in warsaw um or they're moving like the minute after we sign the safe and so like having capital that sits under this like u.s banner just makes complete sense and yeah as i was going to ask because everyone i talked to said founders are moving earlier and earlier to the u.s yeah are you are you competing or are you losing deals to american firms who are even trying to get in at the stage that you invest in as well yeah look i think every fund is investing globally um so you know all the best funds in the world looking at the same pre-seed deals in london and paris and berlin but also all the rest of europe so we continue to compete against all of them and I think like we relish that but at the same time we are keeping a strategy where we can say hey we can be a fund that we have transatlantic so you get London you get the US we're not thesis led so if you do want someone over in the Bay Area who's like super specific on dev tools like what a syndicate and we can lead that or co-lead that and that's a big thinking of like the way we've set it up so yes we continue to compete but you know our strategy is still designed to be as collaborative as it possibly can to the people who run other strategies and can bring something different to the account table and the select fund is that specifically for this new fund that you're raising or does that you know is that allocated for any of the more recent funds or any funds yeah good question it's it's agnostic so it doesn't just have to be invested into um fund seven core companies it can invest in like a fund five company that's maturing um and that we're really excited about So there'll be like a lag compared with the core, if that makes sense, which is natural.

5:13Yeah, that's interesting. I imagine you've probably already got a list of companies that you're thinking about or you're like ready to deploy into, right? Was that part of the pitch to LPs when you were raising it? Is that actually we know that these companies are at a certain stage, like not just the ones that it's probably too late for, you know, like the revolutions, right? Maybe that's probably too late stage being valued at over 100 billion or whatever it's today. But, you know, what was the pitch? Actually, we've got like these 10 breakout companies at about series B that we think we could get access to deploy into.

5:47Will Bennett:A little bit, honestly, like we try not to second guess ourselves. Like we want to make a first principles decision every time we deploy from that fund. So yeah, it's like a super long list of like, frankly, most of our pre-seed companies that do graduate to come into that zone. um we try to keep it like a little bit independence that we're looking at it fresh as much as we possibly can and to make a new decision each and every time i think like speaking only for myself like i would have such confirmation bias of the folk that i've worked for for like worked with sorry for yeah just and you're like hell yeah let's do this again um so like a little bit of independence but at the same time for sure we have like an unfair advantage and like deeply understanding um those businesses and those founders so um yeah like a bit of both to be on us and has the what you're looking for in a kind of pre-seed founder changed at all like you know we're looking you look at the companies that are coming up and often it's like academics or researchers or it can be quite from the outside looking maybe quite different profiles to maybe like a typical commercial minder technical co-founder now we're seeing either repeat founders or very academic researchers have has what you're looking for changed yeah i think a bit.

6:55Will Bennett:I think the different founder prototypes have definitely become more in number. So we are still super excited about their hacky 20 something, 30 something year olds who spent three years at amazing scale up. We are also excited about PhDs spinning out, you know, in the last six, 12 months, we've backed folk doing time series, healthcare modeling and formal verification and manufacturing space, neurosymbolic learning. And of course, they're a little bit different. Like there is not a startup where you can become best in class at scaling a business, doing those things like we are backing topics for the first time those people just are a little bit different we support them differently and they you know i think the one thing that's even changed since i started in venture is that the learning curve can be even steeper because so much of the things you want to learn are open sourced so i think we are almost able to worry less about like how quickly can you grok the like requirements of scaling rapidly because like it's everywhere like we're in a great ecosystem we see camp is a network of people doing that so even if you come from phd program and maybe you look a bit different to a prototype that we might have back before we're even more confident that by entering that network you will kind of you know get that super fast and of course we're doing the work to recognize the qualities in people whereby they can get to that level and what when we look at pre-seed it's like the valuations that are up arguably even traction is often up what does pre-seed mean right is pre-seed just the very first check that somebody raises do you i don't know like you you could argue that like a 2019 series a yeah it's much more like a 2026 pre-seed yeah um so yeah what is pre-seed today yeah man i like i agree with you like i would be you know i don't think there's a clean definition at all we are investing in people who have nothing and we just know them really well we think they're amazing we're also investing in people who had like what feels like instant pmf of a type you know clearly the revenue is not recurring yet but are doubling not the month with like proper proper customers and and those both are the first check they are both the same age of company and sometimes the round size is the same sometimes it's wildly different i think it's important for us to like have a strategy that accesses all of those things um so i don't know we are like hyper focused on the first check our entire proposition is like from day one to kind of getting you to a world class series a b and c um we're trying not to overthink like what happens in those first two months because the yeah as you say like it's crazy the amount of what people can achieve now and we also have people in the portfolio who are saying hey we we love to raise and hire two people and we have a plan to spend the rest on compute or credits and scale that way so that's like a whole different kettle of fish where the first years looks super different again and the pre-seed moment is used for like a whole different spend category yeah that's really interesting and are you are you seeing the fund evolving in the things that it invests in you know like across Europe we're seeing a general transition towards deep tech towards defense more robotics AI as opposed to I guess some of the bigger wins in seed camp uh whether it was like UI path or revolution you know like a much more traditional software fintech yeah how how does how has the the firm had to change to adapt to this new world with very different industries yeah I think it's aggression and honestly less than me think i think we've actually never had a really strong thesis about what people should build we think of ourselves as kind of confidants we're not out there with a thesis or a market map looking for their next best thing over here so actually like a gentle evolution i think one thing that always really appealed to me at ckent before i joined was like we'd already invested in several waves of technology from like mobile revolute and wise through to kind of Enterprise Classic, if you like, with UiPath.

11:01Will Bennett:And then already before I joined, kind of in post-Noam Shazir papers in 2017, like Gen.ai Wave 1 with Synthesia and FluidStack and those types of companies. And now we're kind of in whatever you want to call today, like Frontier Tech is all the rage. So gentle evolution, honestly, we've always come with a bit of a prepared mind. But like learning fast with entrepreneurs, we want to be the company building partner. we're never going to pp the people coming into the room being like hey man we've been looking for this thing you've been building for the last couple of years because i think it's a bit of a it's a bit of a grift sometimes and we'd much rather kind of specialize what i think venture capitalists can be amazing at which is kind of everything else about the business all of that said are we going out of our way to be much better networked into defense communities yes sure um It's really important with about three or four defense companies in the UK and Germany mainly, actually.

11:57Will Bennett:And yeah, we absolutely want to be the partner that can plug them into the MOD and the Bundeswehr and the DoD. And seeing those communities buy tech at an ever-increasing rate, frankly, we're in June, is extremely cool. And there's obviously the macro headwind, which is geopolitics, but then there's also the customer change in dynamics. and whatever you think of markets like when customers buy stuff really fast like something's happening and yeah we are keen to make sure that as soon as we wire the money we can put our entrepreneurs into into contact with like the right people to do that so yes um but from like a support perspective rather than like a we are looking for x y or z perspective if that makes sense yeah god always just looking for great founders and that's like a really interesting value add from your side at seed camp what are the what would you say is like the main benefits of getting seed camp on your cap table and what are the things that you really pride yourself on as a firm yeah um the way i normally end up talking about it is like because we've only ever joined a company's journey at the first check there is a seed camp promise within the community of founders and hundreds of thousands of employees employed at those companies whereby if you do take Seekamp's money, you have 20 years of not just kind of knowledge and experience and mentorship, but like true access to hiring customers in the portfolio.

13:22Will Bennett:We also have the privilege of kind of these mature companies who benefited from that network in their day. And, you know, some of those now sell into like 90 % of the NASDAQ, or, you know, maybe they have been the first company in the portfolio to set up their fourth US office, or like some random example. And, you know, we have to have personal knowledge about ourselves as investors but we're at a point now where there is someone in the portfolio who has tackled the problem you are solving incredibly well and we think of ourselves as kind of making those connections happen so i think that's you know one big thing i think second big thing is like kind of what i mentioned earlier like having been through different cycles been through companies that went kind of vertical green line and then didn't end up where they wanted to be i think we have also ended up um in situations where we like have to stand by our founders when there's late stage capital with different slightly different incentives and these kind of dynamics like that's something that i think not everyone can say um so we're very proud of like being able to step in in those situations with the experience um that we've had and then look i think the third thing is there's probably a bit of hypocrisy in europe at some point in time about going to the us um and like selling in the us in this kind of slightly nebulous way um without like the funds being in the us frankly and so we wanted to like be the pre-seed partner that is in the u.s like end of um and importantly on both coasts to drive whatever it is you're trying to achieve over there um which i think is becoming more and more to like front of mind like the last three investments i've been involved in and were either already in the u.s like europeans who kind of just moved or straight after investment they were like hey this is my date like you guys need to help me get my visa by this week before because i'm going to el segundo window for my customer poc starting on this date and it's like hell yeah that's like epic pass to action but also like that's exactly where we can help yeah that's so interesting it seems like it definitely seems a trend of more it feels like other european bcs are now trying to be like how do we figure this move out how do we add value in the us because it's what founders is just like desperate for um and then and then looking at like how the fund has the firm has changed you know i I think you're probably the first pre-seed fund in Europe to cross a billion assets under management.

15:42That's a huge achievement, but it's also, that's a lot of money. How has the fund had to change? I'm sorry, you're calling it the fund. How has the firm had to change to sort of, I don't know, manage that amount of capital? You must have this insane list of portfolio companies because you invest at the earliest stage. There must be like, honestly, like 500, something like 500 to 1 ,000, maybe even more. I have no idea. how do you as a firm have to change and adapt to deal with like these 20 years of companies a billion dollars of AUM but you are writing small checks at the earliest stages and still

16:14Will Bennett:a relatively small team yeah that's a good question um so it's closer to 500 than a thousand but I think a big part of it is hiring like absolute best-in-class people um who are not on the investment team so like I would like to have quite a lot of confidence that the people we have in like functions that support founders and other tasks are unbelievably good at what they do um i think i suspect that you know we have avoided a world where anyone in the investment team will worry about kind of making those relationships work like we're all extremely comfortable um so that's the first thing i think the second thing is like having so much humility like we every time we make an investment a couple of us might be the leads on that investment but the whole all seven of us would support the company in different ways so there have been many times where you know carlos's experience with revolute is like the only experience that founder needs to hear for a few months and like i just won't be as close to that for a moment and then you know i'm on the phone like helping them close a hire so we all kind of like adjust gently into different portfolio companies um when there is a moment when we can like really move the part forwards um and equally um i think we don't have the impulse to like always be on people's back and be like getting updates and reporting when you know you're taking two months to rebuild the product and we are like extremely relaxed about giving people space we are also increasingly backing folk who've done it for the second or third time we will be able to help them massively at two or three points in a year we aren't going to be like helping them navigate stuff that they know at least as well as we do for the rest of the year um so these things all kind of come together to like um manifest a platform that adjusts for every founder so that's honestly a big part of it and also just trusting a team that is like really really good at what they do amazing and you're going to be expanding the team you're thinking about changing the structure especially you're going or doing more on this kind of select fund it's like i don't know different skills that people always talk about doing that kind of late stage investing you know what does it look like in the next kind of six months to a year yeah good question um look i think um firstly no comment but we were we are like all in the u.s more and more um i will by the nvi i'll have been a few times i think there's obviously a world where that team gradually grows at a time um and we develop all the muscles that we have in the uk and like make them even better in the u.s so i think that's if there's one thing that like we want to would add headcount it's kind of on that and then yeah in terms of the investment team like i think seed camp one of the reasons it still works is that everyone's worked together for so long like i knew the team for a few years before joining the rest of the team has worked together for like over a decade in most cases and no partners ever left the fund um so like that enables like the trust amongst the team to be like extremely high if someone is in california for a month um and there's this kind of like back and forth so yeah when we hire it's like extremely serious so we want like another like amazing person to kind of be able to become like you know the journey that like sierra and felix have been on from like interns to partner um yeah like that's that's a bit of thinking i was about to ask you my final question which maybe you've already answered but i was gonna say like what is the secret sauce you know like the seed camp has been around for coming up to 20 years there's in a lot of kind of pre-seed funds in europe i think ctap is probably well almost only the longest standing but also probably the best right i think i don't have the data but i think in terms of the track record of the reputation it's certainly if not the best up there why do you think that is like what is the secret sauce that you managed to get right consistently for so long yeah um i think it's like we all like each other a lot um the team like really likes working together um which is a big part of it because i think one failure mode for funds is like claiming investment for your own track record and these kind of things and we basically have zero of that um our internal system is like just the companies in the fund and with names against it but that is your role to support the company there is no kind of um sense that there was kudos there for for kind of fighting the company so to speak um so that's like honestly probably the main thing um and then yeah look this is such a long-term game like we don't probably celebrate the deals we do as much as we could we don't celebrate you know when a company gets marked up to series a or b um we like really really think about this for kind of um everyone's whole career basically so um that enables you to like zoom out from like the day-to-day which like is like extremely up and down working in startups or with startups um which i think like can be extremely tough as well so um something to do with having like a bit of a level head and not celebrating the highs or all those too much amazing well look it's fantastic news um you know i'm a big fan of you and the team what you've all built it's uh an amazing mark of success and so yeah congratulations and thank you for taking the time legend sir thanks so much man speak soon

21:25Thank you.