February 20, 2019

Entrepreneurs on acid

Entrepreneur First this week raised a whopping $115m new fund. But is the company builder scaling too fast?

Amy Lewin

8 min read

Credit: Entrepreneur First

Late last year, Henrike Schlottman boarded a plane in Berlin. She was headed to London to seek her fortune.

For the seven weeks before, Schlottman, a UCL graduate and ex-consultant, had been working on business ideas at company-builder Entrepreneur First’s Berlin headquarters but was yet to find a co-founder. It was getting desperate; Entrepreneur First only lets cohort members who have paired up by the end of the eighth week of the programme continue to the next phase. Solo founders are not allowed to complete the final six weeks of the programme, at the end of which paired-up founders pitch to EF’s investment committee.

Yet Schlottman was far from the only one. Across Entrepreneur First’s London, Paris and Berlin programmes, 29% of founders were unpaired, according to EF. Some had given up hope of finding anyone to build a company with. And so, on Friday 16 November, Entrepreneur First announced that people could pair with someone from any of the three locations.


"It did feel a bit frantic and panicked," said one founder who has been on the Entrepreneur First cohort in London known as LD11. "It’s already hard enough to imagine forming a company with someone you’ve barely met, but to find someone from a different cohort who you haven’t even seen around…"

"We do think it’s easier to start a company with a co-located person," admitted Matt Clifford, co-founder of Entrepreneur First. "We wouldn’t want to pretend to those people that it’s as easy to form a team [based in different cities]; one of our main value propositions is that we physically move 50 or 100 individuals to the same place. But if you’ve come to the end of the normal team-building process [without making a match], options are stop now, or at least meet other people."

Four cross-city teams were eventually formed, and are now building businesses together, remotely.

Musical chairs

Entrepreneur First, which was founded in London in 2011 by Clifford and fellow ex-McKinsey consultant Alice Bentinck, has been called many things: ‘Love Island for founders’; ‘social experiment’; ‘intense’. Speaking to dozens of members of the current cohort, many have simply called it chaos.

"It’s like musical chairs… on acid," said one founder who, on Monday 19 November – four days before the pairing deadline – had still not found a co-founder. On Entrepreneur First’s global Slack group (icon: a unicorn), there’s a channel that simply lists founder breakups and makeups; there were a lot of recent updates that people were ‘available as a co-founder’.

For EF, this is a problem. Like all investors, Entrepreneur First is playing a numbers game; it needs to build as many companies as possible at this early stage to improve the chance that at least one of them will be successful. So far, more than 100 companies have been funded by Entrepreneur First, and its website lists six exits. Placing more bets on more horses at the starting line increases the odds that it will win (funnily enough, its biggest success story to date is an AI startup called Magic Pony, which went through Entrepreneur First’s third cohort and was sold to Twitter for £102m in 2016).

The situation also undermined the thesis that underpins Entrepreneur First; that if you bring amazing talent together, they can build great companies. Its website proudly states that its programme ‘is the best place to find a co-founder’. Either the talent bank is running dry, or Entrepreneur First’s matchmaking abilities are straining under the pressures of scale.


In September 2017, Entrepreneur First raised $12.4m from Greylock Partners. LinkedIn founder and Greylock investor Reid Hoffman – a proponent of ‘blitzscaling’ – joined the company’s board. And then Entrepreneur First started scaling, fast. In April this year, its first Berlin cohort began. In September, the first Paris cohort kicked off. There are also programmes in Singapore, Hong Kong and, starting next year, Bangalore.

Entrepreneur First this week said it had raised a whopping $115m new fund — which it says is one the largest pre-seed funds ever raised — to enable them to back more than 2,200 people who join its various programs over the next three years. 

You’re taught to scale once you have a proven business model: Does Entrepreneur First have a proven business model?

Some of the founders I’ve spoken to from LD10 and LD11 have said they think it’s scaling too quickly."You’re taught to scale once you have a proven business model," said one."Does Entrepreneur First have a proven business model?"

Over time, Entrepreneur First has been tweaking its model. Its team have become increasingly hands-off with founders – and much more so since the fundraising last year. Founders have relatively few touch points with programme managers, besides weekly modules on subjects such as customer development and building a sales pipeline, and team and individual check-ins. Not that this is necessarily a bad thing: "We have a lot of time for ourselves to work on our company," said Zeena Qureshi from LD11. "It’s not too full on – but if we need the help, it’s there."


During the weekly check-ins, programme managers assess how productive pairs are and actively encourage teams to breakup if they think they’re not right for each other. (Sometimes these teams don’t agree with those assessments.) "It’s not so much about ideas, but your productivity as a team – how quickly you can iterate through ideas," said one member of LD9. The average founder goes through two and a half co-founders before they find their match, according to Entrepreneur First.

One LD11 member, who had only been working with her co-founder for two weeks when we spoke, admits that starting a business in this way is "risky". "We don’t have a strong foundation, a long relationship, or prior knowledge of each other." Yet, she said, for people who don’t already know "the perfect co-founder… this seems like a reasonable way."

"Intense but fun"

Not one of the dozens of founders I spoke to regretted their time at Entrepreneur First. And all wanted to keep Entrepreneur First onside – few would speak to me on the record. Entrepreneur First now has a 1000-strong group of alumni, and is well-connected to many investors and influencers in the tech ecosystem. Why burn those bridges?

"A lot of people are feeling like what Entrepreneur First wants is not necessarily what’s best for me," said one member of LD11 – many founders have struggled with the compact timeframe of the programme, which forces many to make crucial decisions faster than they are comfortable with. "But most people are happy to be here. In the worst case scenario, we spend a few months acquiring a really cool network of people."

A lot of people are feeling like what Entrepreneur First wants is not necessarily what’s best for me

"I wish I could do it all over again," said one especially enthusiastic founder on LD11, who was happily paired with a co-founder long before the week eight deadline. "It’s intense, but fun." Another first-time founder on LD11, who joined Entrepreneur First with no intention of taking investment at the end of the programme (she wants to build her business more slowly, and raise money at a later stage with a higher valuation), said it had been useful for connections and learnings. "I came with an idea and experience; I left with a plan," she said.  

The 75 or so pairs who did incorporate their businesses on Friday 23 November now have six more weeks to hone their business models. In mid-January, they will present to Entrepreneur First’s team of venture partners. For each team, there’s £80,000 up for grabs, in return for a 10% stake in their company.

This next phase "is really miserable," one member of LD9 told me; many founders, who may or may not really want to work with each other, spend six long weeks scrabbling to find a business model that stands up. "But you’re so hyped at that stage; and you have the chance to get £80,000 to mess about with."

Shelf life?

EF admits that its programme’s intense timeline lends itself to creating a very particular type of business. If anything, that type of business is growing more particular; moving away from anything that takes time to validate, design, or grow a customer base, and steering clear of regulated industries. This means that EF recognises it is unlikely to produce a Facebook or a Snapchat; its model is much better suited for business-to-business companies.

It also lends itself to a particular kind of founder. Entrepreneur First won’t share statistics on its cohorts’ demographics, but the founders appearing on stage at its demo days are overwhelmingly male, and many come from elite universities or top corporates. Many recent recruits have a ‘technical edge’ – often they have PhDs in machine learning, and are actively hunted down by Entrepreneur First. One founder on LD10 who did a doctorate at world-leading science university ETH Zurich said Entrepreneur First invited everyone on his course to apply.

Network, pitch day, and programme aside, the thing that Entrepreneur First thinks it does best is talent. Co-founder Alice Bentinck often refers to Entrepreneur First as a ‘talent first’ investor, rather than a company builder. Some of the alumni I spoke to, however, questioned whether the talent bank may run dry as Entrepreneur First scales. There are only so many people with machine learning PhDs or deep technical knowledge around the world, and as Entrepreneur First launches more programmes, it needs to recruit more and more of them for every site. "We certainly don’t want to be twice as big as we are today," said Clifford – but he thinks that the day Entrepreneur First runs out of talent "feels a long way off".

After all, it only needs a few ponies.

This piece was first published on December 1 (before Sifted even had a website) and has been updated and republished this week in light of EF's $115m new fund.

Amy Lewin

Amy Lewin is Sifted’s editor and cohost of Startup Europe — The Sifted Podcast , and writes Up Round, a weekly newsletter on VC. Follow her on X and LinkedIn