Hello and welcome to Pathfinders with me, Mike Butcher. We like to look at the code, the capital, and the consequences in the European startup ecosystem. And remember, you can join Pathfounders Network, the new network for founders, investors, and ecosystem players in Europe, where instead of just commenting on our posts, you'll be able to interact with each other. Yes, we are going to build the LinkedIn for Europe and tech. That's what it's all about. So go to pathfounders.com/network and get all the information there, your application form and apply.
Eileen Burbidge is one of the best-known figures in UK venture capital. As a co-founder of Passion Capital, she backed companies including Monzo, GoCardless, and Marshmallow after an earlier career spanning Apple, Yahoo, and one of the first five employees at Skype. She also spent eight years as the UK's Treasury special envoy for fintech, and now she's starting again. Her new vehicle NFG is targeting a £20 million fund to invest at the earlier stages. So why launch a new fund now? What she learned after more than a decade at Passion Capital? Eileen, thanks very much for joining us at Pathfounders.
Thanks for having me, Mike.
So, it's definitely the big reveal because I think a lot of people were wondering what you might be doing after Passion Capital. And you moved on. You've also taken some roles in some other companies, but now you're starting NFG. First of all, what does NFG stand for?
I can't say. It's not very polite if I'm honest. So, I think I'll leave it up to audience speculation or interpretation, but it could be New Fund Group, Next Fund Group, Next Fund Generation, something really nice and, you know, vanilla and non-controversial.
Something like New Go or No Go or...
Maybe something like No Something Given.
Maybe no, no F-U-C-K, as we like to say in Britain.
Well, you came out of the gate this week with, I saw that there was an article in the Telegraph and you did say no jerks, but jerks is spelled with a J. So maybe something else. But let's just zoom out a little bit because it's a £20 million fund. I don't know if that's going to be the hard cap or not. You tell us. What's the kind of thesis? Give us the kind of, you know, the 30,000-foot briefing.
Sure. And also just a quick correction because I do feel Jill was really, really good to cover it, but she's with the Sunday Times, not with the Telegraph. But she was really good about it and actually made a mention early last year, so it was her follow-up on that. In fact, we held a first closing at the very end of July. So, it's been a while, and I would typically not be one to shout from the rooftops and say, 'Oh, look, I've closed a fund,' because I'd rather speak about the activities I get to do with that fund, the investments I make, the founders I'm backing, and I can't say anything about those early ones yet. So, but it was something that, you know, felt like it was nice to have Jill do a follow-up for me and also a chance to thank my cornerstone investors, one of whom is TheMA based here in the UK and another of which is a Singaporean-based family office. But then to your question, what's the point? What am I aiming to do? You're right that the target is a £20 million fund. So it's pretty small, very small really. There is maybe the opportunity to go up to about £30 million, so it might be slightly larger than that. But either way, the thesis is therefore being the first check, being very early. Maybe that's going to be called pre-seed for as long as I'm doing it, but maybe it's going to be called something new because when we started Passion, pre-seed didn't exist as a term and now it's the term. I don't know if it's going to be pre-pre-seed. I've heard some people talk about inception checks or inception rounds. I like to think about it as still investing alongside friends and family members and maybe angel investors, but probably before maybe other institutions if possible. And the whole point is I just want to work really, really early with founding teams as they're getting off the ground and as they're getting started.
Right. Okay. Yes, you're very true, very correct. There has been this new phrase banding about recently called inception funds, which just reminds me of Brian Prey, frankly, but everything old is new again. But you've also specifically said, thank you for correcting me in the Sunday Times, that you're looking at founders in fintech, health tech, infrastructure. Was that right? Or are you generalist?
No, so I am generalist, and I think the hook or the reason the journalists picked up on that is I am going to be a generalist, sort of no-sector, sector-specific investor, and I'm going to be 100% founder-led. So if I were to say to you, 'Oh, I don't want to do this or I don't want to be in that sector, Mike,' I'm sure that I would probably break that rule because if I meet a compelling founder, I'll go and follow and want to back them whatever they're doing. However, the other point that I make, and I think the reason that the journalists picked up on that, is because I think this rush to invest in foundational AI and this rush to invest in language models and everything else, which is extremely important, don't get me wrong, but requires a lot more capital, I think does mean that there might be great businesses, fantastic founders doing other things, of which, by the way, AI's got to be a part of now, it's not its own separate thing, but that maybe will be overlooked because everyone else is trying to chase or go after the foundational pieces of AI.
And also, I suppose you've also noticed teams now spin up very quickly because they can use AI to get to product-market fit quite quickly. They, you know, they're leveraging the exponential nature of AI to go pretty fast. And so it's sort of the market has changed quite radically, and we're also getting very young founders as well, far younger than perhaps previous. Is that something you've also noticed?
I have noticed both. You're right. It's definitely faster and quicker to get something spun up. I do still think, though, it requires meaningful investment and time in order to get something that's sustainable, has trust and security in it, that actually takes into account everything else that might be needed for scaling. But absolutely, getting started, getting going, getting something prototyped, testing it with users, whether that's B2B or direct to consumers, is much faster. And therefore, with that barrier to entry probably coming down, I think you're right that we're seeing younger founders come through, that we're seeing people who might not be even finishing academia or maybe skipping academia or deciding to try something just out of secondary school or high school or whatnot. I also think it's bringing in older founders as well, or it's just bringing greater diversity across the board. So you're seeing younger, you're seeing older, you're seeing repeats, people who might have been operational for so long because they thought they might have lacked the technical skills to start a company but realizing they could do that now too. People who came from other sectors that are thinking they weren't technical enough and now realizing the technology piece, at least to get started, is a little bit easier to reach. So I think we're seeing breadth across the board.
I might have missed it earlier. Did you say £20 million or £30 million you've raised already, or you've raised £20, or you're just announcing it so far?
Yes. So the target is 20 going up to 30, and we've held a first closing which is less than either of those numbers based on the first two cornerstone investors, which has allowed me to already sign a few term sheets and start writing checks.
