Opportunity without Borders
Why efficient market theory of venture is untrue in most of the world and what can be done to correct it

A few weeks ago my colleague Alex Crompton posted a great piece entitled, 21st Century Alchemy, which describes why he’s excited to work at Entrepreneur First. It’s notable not just for the clarity of message, but because it captured what so many of our team feels everyday. There’s vibrant energy that takes hold when you work at EF and it manifests early. I remember telling my wife that I had to stay with EF after only two weeks into my original three-month contract. While that energy is palpable, it’s difficult to diagnose. “Working with great founders” or “witnessing deep tech firsthand” is a good sound-byte, but it doesn’t encompass the feeling within the walls. Alex put to words what so many of us have feel. As Matt Clifford said in our Slack channel, “I’m actually mad I didn’t write this myself.”
“If we can get it right, uncovering the secret to creation will have more impact than any investor has ever had.” — Alex Crompton
And yet, as I read the Alchemy post I couldn’t help but feel like something was missing. While spot on for many, it wasn’t quite resonating with me. EF has undoubtedly gained fame because we build companies from scratch and that creation alchemy that Alex described is clearly our edge. But the thing that keeps me up at night isn’t solving the creation equation, it’s what happens once we do.
Laying the Groundwork
Last year I identified that our measure of success was changing. Having cool startups deliver amazing pitches at Demo Day is great for press coverage, but our real KPI is whether those cool startups grow into global businesses. EF only succeeds if our portfolio succeeds. Growth requires investment, which is why we launched the Funding team back in August. It reflected our acceptance of the responsibility to the founders we attract.
We can’t just leave fundraising outcomes to the will of the free market. Conventional wisdom states that the best founders will always get funded. The belief is that the free market is efficient at identifying quality and ensures that the best innovation lives to see another day. Conventional wisdom is wrong. After a years of navigating venture across Europe, Asia and the US one unfortunate truth has become glaringly obvious: talent is global but opportunity is not.
The Unpopular Truth about Startups
Growing a business requires a lot of stars to align. While it’s easier than ever to start a company, it’s more competitive than ever to scale one. It requires capital for investment, talent to hire, customers to sell to. Comparing deal volume or total raised across geographies completely ignores the fact that certain business can only flourish in certain places. Scale requires density and density usually results from focus. All the great tech hubs have achieved that feat by doubling down. London has finance. Boston has life science. Helsinki has games. Hong Kong has IoT. Pittsburgh has autonomous vehicles. SF is the obvious exception where really anything has a shot, but that’s been 40 years in the making.
There’s obviously and chicken/egg situation at work here, and that’s a more complicated issue than this post can cover. If talent isn’t available in a given geography there won’t be capital to fund it. If there isn’t capital available it becomes incredibly difficult to attract new talent beyond an initial founding team. And even if there is available talent, if local investors don’t have expertise in a given sector they may not be able to accurately assess quality. Long story short; there are a lot of elements to building an ecosystem. Scaling is local, but it’s not always close.
It’s fine if a founder’s passion aligns with the local investment flavor. But what happens to the founders of a VR company in Porto? Where are the Spacetech seed funds for Mexico City? How can you build a leading developer tools startups from Iran? Certain companies need to be built in certain places that have the right balance of talent, investment, customers and institutional knowledge. Only when the soil is right can a startup evolve to a scaleup.
The Real Risk at Hand
This is a pretty big challenge for Entrepreneur First. I don’t think we’ll ever have a “program in every country” model, but we must ensure we’re attractive and accessible to the the world’s most ambitious. If we want to truly become the leading institution for innovation we can’t allow geo-arbitrage to hold us back.
Some of the strongest teams in the EF portfolio have struggled to raise purely because they’re not based where they need to be. When this happens no one wins. Visionary founders see their dreams darken. Investors don’t get to back the best. The world doesn’t take its next step forward.
But this is an issue much larger than EF. What if Elon Musk never got a chance to move to Canada? What if Zuckerberg grew up in New Guinea instead of New York? If they were born with the same ambition and intellect but not the geography would we still have their world changing innovation? What’s the anti-portfolio of the companies that could have been built if they only got their shot? Is that a risk we as a global tech community are willing to take?
Fixing the Failure
The best venture investors will say that you shouldn’t worry about the deals you passed on, worry about the deals you never saw. EF has a modified reality. We need not worry about the investors that pass on our founders. Instead we worry about the investors that never saw them. My team will never be responsible for converting a venture deal. Only a founder can convince an investor to actually invest. But what we will do is make every effort to remove friction and clear a path to the negotiating table. We amplify outcomes by eliminating obstacles.
So what can you do mitigate the global talent / local scaling reality? From our perspective there are four paths:
- Education: How do you bring new capital into the venture asset class? It’s not as simple as inviting them to a few events and hearing a compelling pitch. Valuing a seed stage business with a few engineers and an MVP is an incredibly subjective task. No amount of spreadsheet analysis will eliminate uncertainty. Market norms can help, but it’s impossible to build conviction if you can’t see the path to exit. We’re seeing this now and Singapore as we did in London a few years ago. Partnering with traditional financiers and walking through the how venture ecosystem works can change a spectator to a participant. How do funds work across stages? How are startups valued at Series A? Where are the networks of advisors/investors and how do you engage them to ensure runway? This is a hard challenge, but one we’ll take any day of the week.
- Distribution: The great thing about capital is moves across borders very easily and a lot of it is looking for yield. The global capital market is becoming smaller and investors increasingly look outside tap into high-growth/less competitive markets. On the founder side, fundraising is a low probability game so more contacts correlates with more success. There are investors all over the world with every form of investment thesis or strategy, but chances are they won’t all be a cab ride away. Getting in front of them is a challenge to be sure, but it doesn’t have to be. Fortunately we have this great thing called software.
- Innovation: Equity investment is the optimal method to fund an early stage business due to clearly aligned incentives. But there’s a point at which equity capital dries up and when it does we need to get creative. Financing through a range of instruments like venture debt, grant recycling or revenue share may be necessary until a robust equity market takes hold.
- Relocation: Capital is only one piece of the puzzle. If all your customers are based half a world away it’s likely time to pack your things. The most obvious example of this at work is moving Stateside. Much of what’s made Israel such a Startup Nation is its people’s willingness to move their life in pursuit of their business. The Bay Area has been the final destination for most but as new tech hubs continue to develop founders will be given greater optionality for their scaling. Regardless of the geography, any cross-border transition is ripe with friction but building those bridges is front and center in our minds.
My EF
Alex penned the Alchemy piece to explain why he’s still excited about working for EF after four years. This post is an attempt at telling my own story. Our challenge is to scale companies in spite of geographic roots. This charge, to allow opportunity to transcend borders. is what drives me at EF. Alex was passionate about the magic that takes place on Day 0, but I’ll stay focused on Day 1. When EF solves the creation equation, the Funding team will be ready. We’re building a future where the best and brightest can build their dreams, regardless of nationality or hometown. Talent is global even if opportunity isn’t. But it will be….
Matt Wichrowski is Head of Funding at Entrepreneur First (EF.) EF runs full-time programmes that fund the most talented scientists, engineers, developers and industry experts to find a co-founder, then helps those teams grow their businesses and raise funding. We’ve built >100 companies worth >$1B so far.
We currently run programmes in Berlin, Singapore and London, you can apply here or sign up below to get advice from the EF team on your startup journey.
Special thanks to Alex Crompton and Anne Marie Droste for their help with writing this post

