Why It’s the Age of the Investor-Entrepreneur

Why It’s the Age of the Investor-Entrepreneur

“We want to create the kind of investor we needed when we set out to build our own companies,” Taavet Hinrikus, cofounder of early-stage investment fund Plural explains.

Plural’s founders—who have raised €250 million ($247 million at today's exchange rate) with the aim of leading early-stage rounds between €1 million and €10 million—are something of an overachieving lot, bringing with them a wealth of experience in the art of the startup. They comprise Hinrikus, cofounder and CEO of Wise, Songkick founder Ian Hogarth, angel investor Khaled Heloui, and Teleport founder Sten Tamkivi. With their track records in leading such notable successes (the group has also played significant roles in Skype, Bigpoint, and Topia), they now intend to offer their entrepreneurial expertise—as well as capital—to their portfolio of companies.

“In Europe, only 8 percent of investors have worked in a fast-growing tech company.” Hinrikus explains. “We are decades behind the US. Founders have a brain configured for what life for entrepreneurs is like. There are too many investors asking why legal costs are higher this quarter than last quarter. That [sort of thing] doesn’t make or break a company—but ex-founders can zoom in on the things that matter.”

Plural plans to expand the team rapidly—looking to add a total of 10 entrepreneurs as investors by the end of the year, another 20 the year after, and thereafter maintain an ambitious rate of growth. “We have identified a bunch of possible new investors and are working to identify the entrepreneurs ready to make that journey,” Hinrikus explains. “People prepared to become a partner you can trust over the long term. There is too much short-term-ism in investing. We’re looking for brains that know being a company builder means not looking at one line in a spreadsheet, but sitting next to you and being on the wavelength.”

So far, Plural has invested in Certific, a company that offers guided home testing for conditions such as urinary tract infections or Covid-19; Field, a renewable infrastructure startup working on battery storage; insurance disruptor Feather; blockchain-based legal, tax, and accounting support platform Koos; metaverse fintech and avatar platform Ready Player Me; and student banking challenger MOS.

“We’re completely agnostic on sectors—but we all gravitate to harder things to resolve,” he explains. “Khaled is fascinated by AI, Sten is keen on Web3, and I’m climate curious. In terms of diversity, our portfolio has 29 percent female founders and 36 percent minority founders. We’re fully aware that the world needs a lot more diversity, but there’s nothing in our term sheets yet. That sounds more like PR than a business decision.”

The difficult financial headwinds have made fundraising tougher, although there’s plenty of capital looking for deployment. According to Crunchbase data, investment in European startups dropped from €29 billion in the first quarter of 2022 to €14 billion in the second quarter—although VC funds are still raising money at the same rate, with the UK and Germany leading the major players.

“Thinking in national terms isn’t enough,” Hinrikus insists. “We’re looking to help Europe as a whole accelerate its ecosystem development. Estonia got really lucky, thanks to Skype founders staying in the game. Now Estonia has 10 unicorns for a 1.3 million population. I don’t love the word unicorn, but I would love to accelerate Europe in the same way.”

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