Startup guidance more accelerative than capital alone, by Nick Freer

Having been ensconced in the world of corporate PR for more years than I’d care to admit, including during the dotcom era where I advised tech startups as a consultant with an agency in London, I take a keen interest in how press announcements resonate after hitting the headlines.

In March, one such announcement around the launch of a new tech founder fund caught my attention, in no small part because of the mixed reception it received across the startup and investor scene.

“Project Europe”, a €10m fund backed by Berlin and New York VC firms and over 120 founders who have ‘been there, done that’ (essentially built and exited startups), was heralded in the tech press and as one leading publication framed it at the time, had the “European VC set buzzing”.

The Project Europe fund aims to help entrepreneurs under the age of 25 by providing mentorship and investing in up to 20 of them, offering €200,000 in exchange for 6.66 per cent of equity.

While there were many plaudits for the initiative, particularly around the involvement of so many successful founders, there was also a good helping of  naysayers; some termed the age limit shortsighted, others took issue with the level of equity being taken, and an overriding criticism was over the size of the fund itself.

According to those behind the fund, the rationale for its creation stemmed from a less supportive US vis-a-vis Europe in current political times and a collective desire to create more tech titans in the region.

Bringing things back to the Scottish startup scene, much respected scaleup C-suite Richard Lennox says the fund raises some interesting questions for ambitious founders based here: “Everyone recognises that the angel and syndicate network in Scotland is good for early stage, but Scottish companies need to leave Scotland for the next rounds.”

Richard’s point was best illustrated earlier this month, when Edinburgh-headquartered Wordsmith AI announced a $25m series A investment led by global venture capital firm Index Ventures, which itself has backed other storied startups including $45bn fintech Revolut and Mistral,  Europe’s most valuable AI startup.  As an agency, we worked with Wordsmith CEO and founder Ross McNairn, like Richard Lennox a former Skyscanner executive, and Index on the announcement.

On the flip side, as Aberdeen-based CCU International CEO and co-founder Beena Sharma wrote in a LinkedIn post this week, not all success stories come with a funding announcement.  As Sharma put it: “Sometimes, choosing not to raise, or walking away from a term sheet is the bravest and most values-driven decision a founder can make”.

Supporting Glasgow-headquartered Simple Online Healthcare, one the UK’s fastest-growing digital healthcare scaleups, around its annual results announcement this week, CEO Addy Mohammed drew attention to how the decade-old company remains self-funded, while reporting revenue tripling to £66 million.

Like many of Scotland’s most successful startups, it’s no surprise that Simple Online has a Skycanner connection of its own, with former CFO Shane Corstorphine sitting on its board.  Further demonstration that experienced guidance and support is significantly more accelerative than capital alone.