LAST MONTH Jemima Bunbury and Daan Ferdinandusse incorporated Sartor Technologies, their fashion-tech startup, in America and started decamping from London to San Francisco to seek a seed round of funding—barely three months after they met. They got together at Entrepreneur First (EF), an incubator for startups that was founded in London in 2011 by Alice Bentinck and Matt Clifford, two alumni of McKinsey, a consultancy.
EF curates cohorts of wannabe founders, throwing 40 of them into a room; they must couple up within weeks or face ejection. Ms Bunbury and Mr Ferdinandusse are a classic EF pairing of a sector expert and a tech type. She is a 26-year-old Brit who has worked in venture capital and fashion; he is a 27-year-old machine-learning engineer from Amsterdam.
As Britain’s Labour chancellor, Rachel Reeves, seeks a boost to growth from entrepreneurship, EF is worth watching. EF has launched more than 800 startups with a combined paper value of $11bn. Its programme, run from offices in Bangalore, Paris and San Francisco as well as London, forces founders to demonstrate traction quickly and stress-tests their businesses for venture-capital investment. EF’s staff look for founders who can work productively while hunting for problems with a big potential market. Like reality-TV producers, they step in to tweak the rules or break up couples if things are not working out too well.
After eight weeks EF backs successful teams with a $125,000 investment in exchange for an 8% stake. The process can be stressful (your correspondent, who went through the programme in 2017, can attest to that), but having a peer group in the same situation helps, says Mr Ferdinandusse. Mr Clifford, who was EF’s first CEO, has recently taken on additional responsibilities with the British government, chairing the Advanced Research and Invention Agency, a government-backed R&D-funding agency established last year, and advising the prime minister on artificial intelligence. Ms Bentinck stepped into the CEO role at the end of 2023, with Mr Clifford moving to become chairman.
EF’s portfolio includes Cleo (a fintech firm), Permutive (an adtech platform) and Aztec Protocol (a blockchain-privacy company). It employs 110 people. Ms Bentinck says she is proud of the “enormous” returns EF has generated for its investors and its longevity in a market where many accelerators survive only a couple of years. EF now attracts thousands of applicants for each cohort. Part of its challenge is diverting the ambitious away from steady six-figure salaries in finance or consulting. “We’ve made founding not just viable but an aspirational pathway and career for a bunch of people who didn’t even realise that was possible,” says Ms Bentinck.
Yet early-stage investing is hard, with any returns coming only years down the line. To date, EF-backed firms have racked up a modest $800m in exits. And none of its portfolio companies has the name recognition of Airbnb, DoorDash or Stripe, which emerged from Y Combinator, a San Francisco-based accelerator.
To grab some of that Silicon Valley sparkle, Ms Bentinck has pushed EF towards America since becoming CEO. Most founders now move to San Francisco for the programme’s final stint, hoping to catch the eye of the world’s biggest venture capitalists. Ms Bentinck herself was seconded there last year for the launch of EF’s hub. Seven of the 11 firms in EF’s latest cohort were incorporated in America.
California dreamin’
Although Britain dominates Europe in venture-capital funding, the capital available is still an order of magnitude larger in America. And California’s appeal is as much cultural as financial, according to Ms Bentinck. “The Bay Area still has an enormous draw for the most talented technologists,” she says. “They want to be based in the birthplace of modern computing and they want to be surrounded by people who validate their life choices.”
Succumbing to California’s gravitational pull might not impress Ms Reeves. The same week the chancellor said she wanted Britain to be “the best place in the world to be an entrepreneur”, Sartor’s CEO was boarding a plane to Silicon Valley. Is EF’s tilt to America a worry for Britain?
Not if it makes it easier for British startups to raise funds and keep going. However, it becomes a problem if over time it pulls their operations and focus to America. Reid Hoffman, a co-founder of LinkedIn, who sits on EF’s board, says that the accelerator has a duty to give participants every advantage. “If building a bridge between the UK and the Bay Area can help scale that business, then that is what EF is going to do.”
Mr Hoffman and the EF team hope that some of their portfolio companies will come back to Britain after picking up valuable experience in Silicon Valley. Asked if Sartor is likely to remain in America, Ms Bunbury sounds more pragmatic than patriotic: “It will depend on what’s best for the business,” she says. ■
We’re hiring: The Economist is looking to hire a Britain economics writer, based in London. Journalistic experience is not necessary. The ability to write clearly and entertainingly is crucial. So is knowledge of economics and an ability to work with data. For details go to economist.com/britain-econ-jobFor more expert analysis of the biggest stories in Britain, sign up to Blighty, our weekly subscriber-only newsletter.