In this month’s VC Under The Spotlight series we spoke with Sean Seton-Rogers, who is a Partner at PROfounders Capital – an early stage venture capital firm for European technology startups. Sean who will be taking part in Startupbootcamp’s Tea With a VC event, tells us about his fund’s founder- backed ethos, the types of companies they invest in and shares fundraising tips for founders…
Know your numbers, measure your numbers, be able to talk about your numbers…- Sean Seton-Rogers
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Tell us about yourself
I am an international mutt. I lived in South Africa till aged 10, then the US till aged 30, and now in Europe for 10 years…I guess I keep searching for worse weather! I love running and live music but have yet to figure out a way to combine the two.
Tell us a bit about PROfounders. What’s your founding story?
We set up PROfounders in 2010 to invest in and support early-stage digital companies across Europe.
We also wanted to do something different and create a fund structure that provided real value to startups, and so we only raised capital from founders. All the money in PROfounders comes from successful entrepreneurs who have committed their time and money to the fund. Our average first round check size is €750k as part of a €1-3m round
What industries and regions do you tend to invest in?
We’re interested in companies that use technology to transform painful customer experiences. These can be e-commerce, marketplaces, SaaS and games technologies.
As for geography, we defined our target geographies as Eurovision song contest countries – we have invested into the UK, Germany, Nordics and Spain.
What is your fund’s typical investment?
We invest in Seed / Series A whereby our average first check size is €750k as part of a €1-3m round.
What attracts you to investing in a new startup?
A combination of a) size and scale of the opportunity (what can this company be “when it grows up”?) and b) the strength of the team.
For us, “strength of the team” means an ability to articulate a vision for where the company will be in 2-3 years combined with a strong understanding of how to deliver results in the next 3-6 months.
Do you have any ‘golden rules’ when evaluating a potential investment?
We have only one red flag – a founder or team that is not on top of their metrics and KPIs. If you do not measure, you cannot understand it…if you cannot understand it, you cannot improve it.
What would you say are the current ‘hot-trends’ in the startup scene?
I hate to chase hot sectors, instead we look to see if a company is improving a painful customer experience with technology. That technology can be an eCommerce site, a mobile app, SaaS or software. We also will invest into b2c and b2b2c companies – but the end goal is to make a customer’s experience better.
What advice would you give to a founder fundraising for the first time?
Know your numbers, measure your numbers, be able to talk about your numbers…
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Never try to hide or obscure something from VCs. Bad month on revenue, let us know; disgruntled former employee, be upfront. Rising customer acquisition cost, be open about solutions. If you hide something, it will come out eventually, and you would be better off being upfront early!
Do you have atypical questions you ask founders pitching to you?
At our final meeting, we ask founders to pretend they are pitching to the next stage investors in 18 months. It allows us to understand what the business needs to achieve and also be aligned on key objectives.
Think you’d benefit from meeting Sean 1:1 and receiving instant feedback on your fundraising strategy? Apply here.