I have recently reached Matthew Stafford, one of the co-founders of Student Upstarts. This is an incredibly interesting firm that invests only on graduates, postgraduates or Phd students. You can find the article here.
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Matthew Stafford is a co-founder, with Christian Jakenfelds and Nick Wheeler, of StudentUpstarts. Student Upstarts invests up to £15,000 in exchange for up to 8% into student and graduate teams to start and run their own business. Matthew and Christian also co-founded UpstartsConnect – a co-working space in Kings Cross, London, and Matthew is a co-founder of 9others – a global network solving the problems of business that keep entrepreneurs up at night – all over a good meal with 9others.
The Uk university system seems to be focused on people getting jobs and graduating with an outstanding CV that can help them, so why do you bet on graduates instead of everyone, even dropouts?
Traditionally graduates have had two options – do further study or work for someone else. What Student Upstarts is about is giving them a third option – starting a startup. We think that students and recent graduates are perfectly capable of running a business and we believe it’s the perfect time to do it. We can give a bit of startup cash, some office space, an amazing network and mentoring. It’s not for everyone but we want to be part of that ‘third option’ for those students and graduates who are smart, entrepreneurial and driven to build a business.
You say that you take between 4-8%, so how does the equity you take vary?
We won’t take more than 8% because we think that’s fair for £15,000 and we want the founders to be very incentivised to build a huge business. We’re open to taking less if the team are more developed but this hasn’t happened yet.
In how many businesses have you invested till now and do you think you are going to reach your 100 companies goal by the end of 2015?
We have invested in 5 teams so far and 4 are still running. We’re going through the paperwork for our sixth and that they should have the money by the end of February. More importantly that sixth is the third in two months. Last week we interviewed seven teams and if we like them all then we’ll offer to them all – we have the vision of investing in 100 teams in the next couple of years so we’re aiming of doing 30-40 this year and more next year.
Have you got any success story?
Well, 4 our of five still running is pretty good so far for such early stage businesses! One of the teams has raised further investment and three of the four have regular paying customers.
What’s the ratio in applicants between graduates, postgraduates and Phd students?
Of the five teams there are 3 PhDs, 6 undergraduate degrees and 2 masters.
How do you see the startup scene in London and what do you think the best three startups are?
The London scene is great and getting better – it’s really developed and matured over the last few years that I’ve been involved. There’s more investment around but it’s never easy to get this – it also shouldn’t be the focus the whole time, which it sometimes seems to be – what’s more important is selling to customers and getting cash in, something that too many entrepreneurs forget.
There are some terrific businesses around but three early stage startups that spring to mind that I admire right now are:
How do you think universities should improve the presence of Entrepreneurship in their institutions?
They should cause chaos by creating and getting involved in as many external networks as possible – too often universities look inwards and try to get the ‘perfect’ solution before acting.
They should also stop measuring/being measured by salary increases and percentages employed and start measuring the number of companies started and jobs created by their alumni.
You have organised a conference with one YCombinator partner, do you see a difference in operating between an american investor and an european one?
Yes, this is a massive question – I don’t have any experience investing in the USA but they do seem to have a greater appetite for risk and they act quicker (whether that’s a yes or a no). They also seem more accessible – I’ve had email conversations with a few well-known and prolific US investors and they’re not hidden away like many UK investors seem to be.
Fred Wilson and other american investors have said more than once that they are seriously looking at the european startups, what do you think it makes them more interesting?
Yes, the world is a small place and there are incredible opportunities for investors here as well as many other parts of the world – it takes a while to get to know they lie of the land though so don’t expect masses of activity overnight.
In what area do you invest the most?
So far with Student Upstarts it’s been e-commerce. I like the internet enabling real ‘products’ with a ‘price’ that can make some ‘profit’ to be sold in huge markets all over the world.