Sentiment of Seed Investors in Europe by Mosaic Ventures

In conducting this research, we specifically set out to capture the sentiment of the Europe-based seed investment ecosystem. It reflects a moment in time (Q3/Q4 2017), and intends to collate insight from a broad base of leading seed investors across the continent - to take the temperature of the community, and help build a picture of the seed landscape.
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Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
SEED investor Mosaic venture SENTIMENT invest Source Mosaic venture EUROPE startup Brexit raise fund UK company increase months di erence decrease year impact SEED invest likelihood
About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
SEED investor Mosaic venture SENTIMENT invest Source Mosaic venture EUROPE startup Brexit raise fund UK company increase months di erence decrease year impact SEED invest likelihood
<p>SENTIMENT OF SEED INVESTORS  
IN EUROPE
Q2 2018
Foreword
Great entrepreneurs dream about creating 
new sectors, reshaping entire industries and 
fundamentally disrupting the status quo. Seed stage 
is the inaugural moment in every startup's lifecycle, 
and often impacts the trajectory of a company's 
journey. Investors who make these early bets, in 
no small part, help to shape the startup's ability to 
succeed in the years to come.
In conducting this research, we specifically set out 
to capture the sentiment of the Europe-based seed 
investment ecosystem. It reflects a moment in time 
(Q3/Q4 2017), and intends to collate insight from a 
broad base of leading seed investors across the 
continent - to take the temperature of the community, 
and help build a picture of the seed landscape. 
At Mosaic, we typically invest after seed, in a 
company's Series A round. We work alongside 
the seed community every day so we hope that 
taking the pulse of the seed investor ecosystem will 
provide useful insights for the founder and investor 
ecosystems alike.
We would like to extend our thanks to everyone who 
made this report possible. First and foremost to all of 
the respondents. Everyone who participated is either 
a General Partner of a European seed fund, or serial 
angel investor.
We are always appreciative of your thoughts and 
feedback, please feel welcome to get in touch at 
info@mosaicventures.com 
Simon Levene 
Cofounder and Partner
Introduction
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Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
Their words
Introduction
We have seen the quality 
and quantity of startups on 
the continent continually 
increase over the last 
few years. This trend is 
bound to continue, as 
more repeat founders and 
experienced startup execs 
take a second or third 
run at building a business 
and as the surrounding 
ecosystem continues to 
grow in maturity.
Pawel Chudzinski 
Point Nine Capital 
It is refreshing to see 
that the majority of seed 
investors are bullish on 
the state of the industry 
in Europe, and are in 
agreement that the quality 
and the ambitions of 
startups on the continent 
is gradually increasing.
Pietro Bezza 
Connect Ventures
The resilience of Europe's 
technology industry, 
including seed and 
venturing investing, has 
been incredibly impressive 
over the last few years. 
Even against an uncertain 
political backdrop on both 
sides of the Atlantic, tech 
hasn't blinked.
Saul Klein 
LocalGlobe
It is best to see Europe as 
one, large collaborative 
ecosystem, rather than 
a collection of nations in 
perpetual competition. 
With this in mind, it is 
fantastic to see seed firms 
increase their presence 
across the continent, 
while maintaining a robust 
presence in the traditional 
centres of gravity.
Alice Bentinck 
Entrepreneur First
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Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
Introduction
European Seed 
Investing:  
an overview
We estimate that seed activity in Europe grew >2x in 
2013-17, to approximately 30-40% of US seed deal 
volume. In the same period, median size of seed 
financings has increased to $1m, (30% smaller than 
the US median).
We count 44 funds have made 6+ seed investments 
each year between 2015-2017, and >75 firms made  
4 or more in that window. Note that this statistic does 
not include accelerators.
The graphic on the right visualises a selection of new 
seed-focused funds raised since 2012, across the 
continent.
Infographic: 
New Seed Firm Formation  
Source: Pitchbook; Mosaic Ventures Analysis
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
43%
GBR
11%
FRA
11%
GER
7%
SWE
8%
FIN
3%
SPN
3%
PLN
2%
NOR
2%
NED
2%
BEL
2%
AUS
2%
CZE
Approach & Methodology
This is a survey of Europe's 
leading seed investors
In the fall of 2017, Mosaic brought together 
Europe's leading seed funds and prevalent 
angel investors at our first "Seed Summit".
We took this opportunity to ask the group about the 
investing landscape, the state of European startups 
and the broader technology industry. 
Over the following weeks, sixty investors completed 
the questionnaire, all of whom focus on seed.  
43% are based in the UK, 22% in France or Germany. 
44% represent seed firms more than three years old; 
25% from a seed firm less than three years old;  
15% are independent angels and 12% are from  
multi-stage venture capital firms active at seed. 
Infographic: 
Q. What country are you based in?
Source: Mosaic Ventures
5
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
These are the key findings
1. The quality of seed startups has 
improved.
2. AI is the hottest investment sector.
3. Over 30% of investors have increased 
focus on France and the UK.
4. Brexit has had relatively little impact on 
plans to invest in the UK or elsewhere 
so far. 
5. Investment in B2B is up, whilst B2C is 
down.
6. Investments in repeat entrepreneurs 
have become more common.
7. Investments in female entrepreneurs 
have also become more common, 
with over 30% of investors making 
more investments in female CEOs or 
cofounders.
8. Over 30% of investors say it is 
becoming easier to raise funds from 
both existing and new LPs, with 50% 
saying the overall climate has remained 
unchanged.
Introduction
6
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
Full Results
SECTION 1
What seed investors think about startups
What seed investors think about Brexit
What seed investors think about their own funds
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Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
The quality of startups 
has improved
60% of investors say the quality of startups 
has improved in the last 12 months.   
One third say it is unchanged and only a 
small minority say it has deteriorated.
What seed investors think about startups
Much better
Somewhat better
About the same
Somewhat worse
13%
47%
6%
34%
Source: Mosaic Ventures
Q. As an investor, how would you rate quality of companies: 
better, worse or the same?
(last 12 months vs. 24 months before that)
Survey compiled by Julian Missel of Vivi Research and 
Mosaic Ventures
8
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
The pathway   
from seed to Series A  
has improved
Follow-on funding appears to be robust. 
Half of investors say their portfolio's ability 
to raise series A or seed extension has 
improved in the last 12 months.   
Fewer than one in ten say that it  
has got harder.
Q. How, if at all, has the ability of your portfolio 
 to raise Series A (or a seed extension) changed?
(last 12 months)
What seed investors think about startups
52%
9%
39%
Somewhat better
About the same
Somewhat worse
Source: Mosaic Ventures
9
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
An increase in seed 
investments made in 
repeat entrepreneurs
While a third of investors say that they 
have made more investments in repeat 
entrepreneurs over the last year, two thirds 
say that there has been no change.
What seed investors think about startups
Q. How, if at all, have your investments 
 in repeat entrepreneurs changed? 
(last 12 months vs. 12 months before that)
33%
67%
More investments
No dierence
Fewer investments
Source: Mosaic Ventures
10
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
An improving picture for 
female entrepreneurs 
There is still much improvement needed, 
however 32% of all investors say that 
they have made more investments in 
female CEOs or cofounders over the last 
12 months compared to the previous 
year. Only a small minority say that such 
investments have declined. 
Q. How, if at all, have your investments 
 
in female CEOs or cofounders changed?
(last 12 months vs. 12 months before that)
What seed investors think about startups
32%
64%
4%
More investments
No dierence
Fewer investments
Source: Mosaic Ventures
11
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
What's hot? AI is the 
hottest seed investment 
sector 
Seven in ten investors are excited about 
the AI sector, while over three fifths are 
enthusiastic about SaaS and Marketplaces. 
Over half regard Digital Health and Fintech 
as exciting. However, investors are largely 
indifferent to E-commerce and IoT.
Q. As an investor, what sectors are you 
currently most excited about?
What seed investors think about startups
70% AI-based applications
64% SaaS
61% Marketplaces
54% Digital Health
52% Fintech
33% Cybersecurity
30% Software infrastructure
30% Consumer services
26% Crypto
23% VR / AR
23% Analytics
15% IoT
13% E-commerce
6% Other
Source: Mosaic Ventures
12
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
What's not? E-commerce 
the sector that investors 
are most likely to shun
Over three fifths of investors are 
disinterested in E-commerce or actively 
avoid it. 
A sizeable minority say the same of  
VR / AR and IoT, while virtually no investors 
would shun AI or SaaS opportunities. 
Crypto divides opinion, with 24% avoiding 
the sector and 26% excited about it. 
Q. What sectors do you actively avoid 
or have no interest in as an investor?
What seed investors think about startups
61% E-commerce
30% VR/AR
24%
IoT
24% Crypto
17% Cybersecurity
15% Consumer services
13% Digital health
11% Other
11% Software infrastructure
11% Analytics
11% Fintech
9% Marketplaces
4% SaaS
2% AI-based applications
Source: Mosaic Ventures
13
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
A rise in 
B2B investments, a fall in 
B2C investments
Half of investors say they have invested 
more in B2B in the last 12 months 
compared to the previous year. Fewer than 
one in seven say the same of B2C.  
Half claim that they have invested less in 
B2C companies in this period.
Q. Compared to the previous year, have you invested more or less 
in...? (a) B2B businesses (b) B2C businesses?
(last 12 months)
What seed investors think about startups
More investments
No dierence
Fewer investments
MORE INVESTMENT B2B
41%
10%
49%
49%
15%
36%
LESS INVESTMENT B2C
Source: Mosaic Ventures
14
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
UK investment incentives 
(SEIS / EIS) do not affect 
the decision-making 
process of seed investors
Three quarters of investors say that if 
a UK company has raised EIS and SEIS 
investment it has no impact on their 
decision making, while a small proportion 
say it will increase or decrease their 
likelihood of investment.
Q. If a UK company has raised EIS and SEIS investment, 
what impact does this have on your decision making?
What seed investors think about startups
Source: Mosaic Ventures
14%
Increases likelihood of investment
No dierence
Decreases likelihood of investment
11%
for 75%, SEIS / EIS has 
no impact on investment decision
15
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
Full Results
What seed investors think about startups
SECTION 2
What seed investors think about Brexit
What seed investors think about their own funds
16
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
A quarter of investors 
are less likely to invest in 
UK companies following 
Brexit
For the majority of investors, Brexit has 
little impact on plans to invest in the UK or 
elsewhere. However, around a quarter say 
that it has made them less likely to invest 
in UK companies. 
Q. How, if at all, has Brexit impacted on your likelihood to invest in 
UK Companies?
What seed investors think about Brexit
Source: Mosaic Ventures
due to Brexit,
23% of investors are
less likely to invest in UK
75%
2%
Increases likelihood of investment
No dierence
Decreases likelihood of investment
17
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
One in seven investors 
more likely to invest 
in non-UK companies 
following Brexit
14% of investors say that Brexit made them 
more likely to invest in non-UK businesses, 
with 5% saying they are less likely to invest 
in non-UK companies as a result. 
Q. How, if at all, has Brexit impacted on your likelihood to invest in 
non-UK Companies?
What seed investors think about Brexit
Source: Mosaic Ventures
Increases likelihood of investment
No dierence
Decreases likelihood of investment
5%
82%
due to Brexit, 14% of 
investors are more likely to
invest in non-UK companies
18
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
Brexit is making portfolio 
recruitment harder, for 
41% of respondents
Compared with the European average, a 
greater proportion of UK-based investors 
reported Brexit had negatively impacted 
the ability of their portfolio companies to 
recruit.
Q. How, if at all, has Brexit impacted 
your UK portfolio's ability to recruit?
What seed investors think about Brexit
Source: Mosaic Ventures
41% 
59%
Increases ability to recruit
No dierence
Decreases ability to recruit
19
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
Full Results
What seed investors think about startups
What seed investors think about Brexit
SECTION 3
What seed investors think about their own funds
20
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
A third of seed investors 
believe it's getting easier 
to raise funds
Around a third say it is getting easier to 
raise funds from both existing and new 
LPs.
Further, only around one in six investors 
say that it has become more challenging to 
raise funds from existing LPs, while around 
a quarter say this of new LPs. 
Q. Has it become more or less challenging to raise funds from 
(a) Existing LPs (b) New LPs?
What seed investors think about their own funds
Source: Mosaic Ventures
16%
50%
34%
23%
45%
(b) ease of raising funds from
new LPs
(a) ease of raising funds from
existing LPs
Easier raising funds
No dierence
Harder raising funds
32%
21
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
32% France
UK
Nordics
DACH
31%
15%
14%
12%
5%
3%
24%
Spain
Israel
CEE
None of the above
Seed investors are 
putting more resources 
in the UK and France
Around a third of investors have increased 
resources in France and the UK compared 
with the previous year. Around one in 
seven say they have increased resources in 
Nordics and DACH.
Q. In which geographies, if any, have you increased resources?
(last 12 months vs. 12 months before that)
What seed investors think about their own fundraising
Source: Mosaic Ventures
22
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
A few final words
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Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
On the data
Investors were invited to participate in this 
research study.
Responses were collected through interviews held 
over the period Q3Q4 2017.
The questionnaire was developed by Mosaic 
Ventures in conjunction with independent research 
agency Vivi Research. Vivi also managed data 
collection and analysis. All data are unweighted.
A few final words
24
Mosaic Ventures | Sentiment of Seed Investors in Europe 2018
Grafton House, 2-3 Golden Square, London, W1F 9HR 
info@mosaicventures.com
</p>