Alice Bentinck - Building a Start-Up Machine

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money.
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**SPEAKER_2** (1:36)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:01)
My guest today is Alice Bentinck, co-founder of Entrepreneur First. Entrepreneur First or EF invests pre-company by systematizing the way that talented individuals find co-founders, develop ideas and scale into companies. They're an incubator of teams and ideas on a mission to create impactful companies that without their help wouldn't exist.
I first spoke with Alice's co-founder, Matt Clifford, over two years ago and have been fascinated with EF's model of investing ever since. Please enjoy my conversation with Alice Bentinck.
So, Alice, I've been looking forward to this one. We've had to push it back a few times, but actually it's been a good thing because the world of investing in early stage companies has changed quite a lot since the first one of these that we had scheduled maybe at the end of last year. You are one of the co-founders with Matt Clifford of Entrepreneur First. And, because it's a very interesting international organization that effectively produces new companies, I'd love you to just start by giving an overview of what EF looks like today before we get into all the origins and the history and the way you operate, which are all really interesting.

**Alice Bentinck** (3:05)
Entrepreneur First is a talent investor, and broadly what that means is that we invest pre-team, pre-idea. So, the first money we deploy is into an individual rather than into a company.
Seed investing has become increasingly sexy and attractive over the last couple of years as valuations have gone through the roof, but really the reason that we do this is because we believe that the world is missing out on some of its best founders.
The supply of founders is currently constrained and largely constrained because of two things. One, a lack of network density in many ecosystems outside of Silicon Valley.
And then two, and I think this one often surprises people if they are based in or around Silicon Valley, the ambition trap of many local cultures, of many of the world's best cities, is that you see many of the most talented individuals caught in careers that may not be the best way to optimize their outcomes. For example, Singapore, you go to the civil service, London, you go into banking. These are very culturally approved career paths for the most ambitious. It's what your peers want you to do, it's what your careers advisors, what your professors, what your parents want you to do.
And so at EF, we tackle these two challenges. So we have a program, it runs in six locations across the world, six countries across the world, across Europe, Asia, and we're also in Canada as well. And the point of this program is to take an individual from the point where they're sort of considering, they're curious, they're just thinking about becoming a founder, all the way through to the stage where they're seed funded. So one of the key things that we do is we've built an environment that enables strangers to become co-founders. So you join with between 50 and 80 other individuals, and you have an eight week period to find a co-founder from within that pool. So about 80% find a co-founder of the companies that are then created through those co-founding teams. They go to our investment committee, we invest in about half the companies that are created, and then we spend another three months working with them to get to their seed round. So we're an unusual beast in a way because we are a company. We operate like a company. We've got 120 people working across these fixed locations, finding the people and supporting the creation of the companies, investing and supporting the companies to get to their seed rounds. But we also do manage capital. So we have about $350 million in funds at the moment. But one of the big changes we've just made is that our most recent fundraise we did on the balance sheet rather than into a fund vehicle. And I can talk a little bit about why we did that.