English
Reporter: How did "Seedcamp" appear?
Carlos Eduardo Espinal: "Seedcamp" appeared because there was a need for a platform which would help entrepreneurs build businesses in Europe. The purpose of this platform was to provide the necessary funding for launching businesses, advice for managers, so that they don't make fatal mistakes, as well as a network of contacts which would help them grow their businesses. Therefore, "Seedcamp" was created to fill a void which existed in Europe before 2007, the year of its appearance.
Reporter: Specifically, how do you operate?
Carlos Eduardo Espinal: We host monthly events, called "Seedcamp Days", where companies from all over the world apply, to be admitted as part of our program. We have about 2,000 applicants each year. Out of them, we select 20 each month, which we gather in a city where they present their business ideas and receive advice from the specialists in our network. We had this kind of meetings in locations such as Israel, South Africa, Singapore, India, France, Germany or Great Britain. We choose the ideas which look to be the best to us and we invest in them. The number of new companies we decide to invest in every year is about 20, on average.
These companies are then introduced into our annual program, usually two of them every month. The one-year duration of the program does not mean that once that year is over, companies stop their training, but rather that its most intense part takes place in the first year.
In the year in question, the entrepreneurs participate in various monthly training events, where top specialists talk to them about various topics of interest. On top of that, we host various meetings where people from our network of contacts offer advice to companies. An example in that regard, is the "Seedcamp Week", in London, our flagship event, which is attended by our most important partners, clients and investors, who help the companies in developing products, growing the business and making investment decisions.
Also, every year we travel for four weeks to the United States, where we go to Boston, New York, Silicon Valley, Seattle and Austin. We meet with all the major names in the industry, companies such as Twitter, Facebook or Google, investors from San Hill Road (an area in California well for its large number of venture capitalists) and investors in New York, such as Union Square Ventures, DFJ Gotham and IE Ventures (investment funds specializing in online startups). We try to integrate every company in our global network.
Reporter: What is the amount you invest in a company?
Carlos Eduardo Espinal: We invest a fixed amount of 50,000 Euros, in each company, as well as cost-cutting mechanisms of 150,000 Euros, which we offer through our network of partners. For example, we can help entrepreneurs save on legal fees or domain hosting. In exchange, we get a stake of the business, which varies between 8% and 10%.
Reporter: What is the geographical distribution of the companies you have in your portfolio?
Carlos Eduardo Espinal: Approximately one third of the 73 companies in our portfolio come from Central and Eastern Europe. Six of them come from Estonia, for example. In Central and Eastern Europe there are many talented engineers, which makes companies in the region the most dynamic segment of companies we are looking at.
But we find good companies everywhere. We have just invested in a company in Portugal. That is because innovation takes place all over the globe, not just in one area.
It is true, however, that certain regions have a talent which has just been unshackled and Central and Eastern Europe are among them. The high potential of the region is starting to come to light.
Reporter: How many Romanian companies have you invested in so far? Are they among the successful companies in the portfolio of "Seedcamp"?
Carlos Eduardo Espinal: We have invested in two Romanian companies: "Brainient" (ed. note: a company which ensures the interactivity of clips for the presentation of products and services) and "Ubervu" (ed. note: a company which is focused on social media marketing services). As for their success, it depends on what we mean by success. Personally, I think that they are, considering that they have been on the market for quite some time and they have seen good results.
Reporter: What is the profile of entrepreneurs you choose to invest in?
Carlos Eduardo Espinal: We are betting on the fact that intelligent people do not waste time working on bad ideas. That is why we like to invest in smart people, who are willing to take a chance, even though they may sometimes make mistakes, and who want to learn quickly from these mistakes. These are the qualities which we look for during the events we host. Before the events, we look at companies which target big markets, with high quality products, which are carefully crafted.
Reporter: Do you prefer companies with a global approach?
Carlos Eduardo Espinal: Generally yes. But, there are markets which are huge, and, if, for example, a company is aimed at the Chinese or Russian market, we do not want to set requirements concerning its orientation. But, companies which come from countries with smaller markets need to think globally from the first day.
Reporter: Have you exited any business you have invested in so far?
Carlos Eduardo Espinal: We made two exits this year, after we made one last year. We sold "Mobclix" to "Velti", for 50 million dollars, "RentMineOnline" to "RealPage", for 9.5 million dollars, and "Crashpadder" to "Airbnb".
Reporter: Did you have any investments that failed?
Carlos Eduardo Espinal: Yes, there have been several failures. It often times happens that a company fails to perform, for various reasons: they fail to raise the necessary resources, they don't grow at the expected pace, or they don't attract the targeted customers.
Fortunately, we have a rather low rate of failure. Out of 73 investments, only five have failed.
Reporter: Considering that in Europe, unemployment, especially among youngsters, is high, can entrepreneurship represent an alternative for people who can't get a job?
Carlos Eduardo Espinal: In Great Britain there is a saying: "Don't take a job! Make a job!". If you succeed in creating jobs for several people, then your business idea also has a social impact, not just an economic one. The companies which Seedcamp has invested in employ over 800 people, which, to us, represents a measure of their success.
Reporter: Thank you!
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