The new”normal” provides brand-new opportunities. That’s the thinking behind a brand-new pre-seed funding program from Heartcore Capital. The European consumer-focused VC normally buys start-ups at seed and Series A, but identifying that lots of prospective founders remain in lockdown and with time of their hands, is moving to the top of the funnel with the launch of a pre-seed fellowship program. Particularly, business owners interested in starting a customer innovation business throughout lockdown can apply for a pre-seed financial investment of EUR100,000 per founder to fund development of a prototype. The whole investment process will be carried out online and begins by means of a simple web type, followed by Zoom discussions with the investment group.”Heartcore is offering EUR100,000 per founder for a 7% equity stake per business– to show that a bigger founding group will likewise suggest a larger initial expense base,”describes the VC. “The investment instrument is a convertible note. The business does not need to be founded yet, nor is a concept needed to apply. All business should run within customer technology(B2C/B2B2C )and be based in Europe”. More broadly, the objective of Fellowship financing is to “build a prototype, with a view to raising a seed round when normal life resumes “. To learn more, I caught
up with Heartcore Capital General Partner Max Niederhofer, where we talked about the program’s creation, who it competes with, and start-up chances after
lockdown. TechCrunch: How did the idea of the fellowship come about or was Heartcore dealing with a pre-seed model prior to the coronavirus crisis hit (I gather it might be the latter)? Max Niederhofer: Heartcore has been investing
from creation to Series A given that we got going in 2007. Half of the financial investments in the last twelve months have actually been in a strategy and a team, often pre-product. But a number of these were large funding rounds where there was currently a fully expanded idea, currently a larger team, currently a business. This is various. We took a seat 2 weeks ago, after we had worked to ensure that our portfolio is well funded, and after closing the three offers we had in the pipeline from pre-lockdown. And we asked ourselves: what if this lasts longer? Is there an instrument that we might come up with that is tailored to this circumstance, that lives the Heartcore values of” no fear, no greed “and puts creators’ needs. Everybody appears to be analyzing their life today, including their life’s work. We understand some exceptional people have lost their jobs. Others might have more time to think of the big idea they have actually been mulling over for a while. What can we offer them to get going right now, instead of needing to wait up until regular life resumes? Will the fellowship continue to be open to applications if/when lockdown restrictions are lifted across Europe? The intention is to keep it open through 2020, potentially into 2021, depending upon for how long it requires to resume “normal life.”We will see what occurs this year, whether the offering resonates with business owners, and we will change accordingly. There’s definitely a possibility that this enters into our operating model moving forward. However like any startup, we will repeat it to make certain that it’s something that makes good sense for creators provided the total fundraising environment. Perhaps, with the maturity of remote working tools, a period of lockdown is an excellent opportunity for a small team to develop an MVP or have an extended period of product advancement without fretting excessive about go-to market. Is that your thinking? That is definitely part of it. This is a good time for focused item work. We also think it’s an excellent time to launch models, get individuals utilizing them, and collect feedback.
App downloads are considerably up. The determination to attempt new things is high. More than that, nevertheless, we think that founding groups will wish to be prepared to raise larger seed financing when restrictions are raised. We want to put them in a position to do so. Which financing sources or other programs do you think the Heartcore fellowship most carefully competes with? It resembles Y Combinator for individuals who can’t leave their home. You’re targeting business within customer technology (B2C/B2B2C)that are based in Europe. Within this meaning, what
type of sectors or products do you believe have the very best chance to be founded in the current crisis and(hopefully)as we come out of it? The crisis acts as an accelerant to some of the nonreligious trends
we have actually been seeing anyway, e.g. the convergence of online and offline. Of course everybody is speaking about the”digital only”companies today, but we invest in B2C and marketplaces throughout the entire customer
invest spectrum: in health, food, finance, insurance coverage, realty, movement, travel, retail/ecommerce, education, media/entertainment, and of course customer performance tools. We are also happily counter-cyclical: we certainly want to talk to creators in the travel sector. We believe
travel will rebound in a big way which online travel companies will disproportionately benefit. We are big believers in technology’s capacity to provide individuals superpowers, but also to help them end up being more human by resolving our typical desires to belong, to remain safe and protect others, to have fun and deal with something meaningful. Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.