High conviction, low volume Playfair launches $70M preseed fund for European startups

News Summary

  • And there was one specific event several years back, the EcoMotion mobility event in Israel, that Smith says really helps to highlight its investment ethos.“I went in to look at the roughly 120 companies exhibiting; about 116 of the companies were doing autonomy for cars,” Smith said.
  • “We’re actually really fortunate in the U.K. to have the SEIS and EIS schemes (tax-efficient schemes for investors), because they brought in a ton of angel capital, and also capital from funds that take advantage of the tax breaks — there’s basically just more money around.
  • While one of the oldest investment cliches says something about the importance of ‘investing in people rather than companies,’ that is perhaps even more true at the super early stage.
  • And, having just one person providing the capital simplifies things greatly.“It gives us a ton of advantages: it means I don’t spend 40%-50% of my time fundraising, and I can spend my time working with our founders,” Smith said.
  • And while having previous exits and success in the business world can be a useful indicator, there are many things that can ultimately determine whether a founder or founding team are intrinsically investable.“We look for a few things, including examples of exceptional performance,” Smith said.
  • For its second fund, Smith said they’ve reached somewhere in the region of 95th percentile for TVPI (total value vs paid in capital).According to Dealroom data, some 19% of seed-stage companies raise a Series A within 36 months.
Earlystage investments inherently have a higher risk of failing, but these risks also come with potentially higher rewards getting in at the ground floor of a startups journey gives VCs more nego [+11156 chars]