Antler: The Global Startup Factory

There's no accelerator program as surgical as Antler.

“People will tell you that more than 90% of startups fail. That is true, but the majority fail for the wrong reasons. We root out the reasons that cause startups to fail.” 

When it comes to building startups, no accelerator is as disciplined as Antler. 

It believes that startups are more art than science, and the entire process is something that can be optimised. By looking at how some companies succeed and why some fail, Antler believes that it can help founders reverse engineer outcomes and build the defining companies of tomorrow. So long as you are exceptional, everything else can be fixed. 

This is best seen in how it runs its programs. Like other accelerators, Antler provides guidance to founders as a cohort, offering masterclasses and office hours on matters ranging from product to fundraising. Those whose ideas pass muster receive a check from Antler, and have an opportunity to raise more money on demo day. 

Unlike other accelerators however, founders don’t need a product or even an idea to apply to Antler. Antler admits individuals on the basis of their skills and experiences, much in the same way that companies might hire someone.  Once the individual joins an Antler cohort as a founder, Antler helps him or her to find other co-founders. Further guidance is also given, whether it be coming up with an idea or making a pitch to an investor. 

This format is why Antler’s co-founder and CEO, Magnus Grimeland, says that they aren’t an accelerator or incubator, but a startup generator. By helping founders with the most common obstacles, Antler hopes to make starting companies easier. In return, they get the opportunity to be the first investor in the companies that these individuals build. 

It seems to be working. After only five years, Antler has already made 354 investments, and they don’t appear to be slowing down. Last year, Antler announced that it raised a US$300 million fund that lets them invest up to Series C. And earlier this year, they closed a small East Africa fund, signalling that Antler has further aspirations in the region. 

This is the type of naked ambition that you see in the best founders, and it’s clear that Antler’s founding team possesses this quality as well. In this post we’ll take a look at: 

1. Origins: Antler’s founding team is seemingly made up of a single archetype: the ambitious overachiever who wants to walk a less conventional route. This spills over into the type of founders they attract and has shaped the company’s DNA. 

2. Antler’s Program: startups can be awfully risky, especially at the earliest stages. Antler seems to have figured out how to reduce risk at every stage, from the people they recruit to the ideas that they fund. 

3. The Business of Incubation: Antler might spend most of its time helping founders, but people forget that they have to generate returns as a fund too. Fortunately, there is money to be made here, although the economics may sometimes be tricky.

4. Future: Antler isn’t the only one who has noticed the early stage opportunity. Accelerators have existed since the early 2000s, and VC funds are now moving in. Can Antler win? It depends on whether they can keep innovating. 

Let’s see how Grimeland and team built this machine. 

Magnus Grimeland

Early Life

Growing up on a farm in a small Norwegian town, Grimeland didn’t have the most exciting or unusual childhood. At 16, he left home for the first time and attended a boarding school called Atlantic College in Wales, a United World College institution. 

While his peers headed off to university after graduation, Grimeland joined the Royal Norwegian Navy Special Forces. This was an unusual decision but it made sense for Grimeland. His family had served in the military for generations, and Grimeland loved the water.  Unlike other tech founders who tinkered with computers, he spent his summers conducting rescues in the Bristol channel with the Royal National Lifeboat Institution. 

While in the Navy, he heard all kinds of stories about college life from his Atlantic College peers, and Grimeland knew that he needed to be where the smartest people were. He had the grades, and with special forces on his resume, Harvard had little trouble admitting him.  

Harvard

Harvard would be a life-changing experience for him. Although he didn’t know it yet, 2003 was a good time to be on campus. 

He rowed on the varsity crew team alongside Cameron and Tyler Winklevoss, who would go on to become the co-founders of crypto exchange Gemini. Outside of the water, Grimeland would write for the Crimson. And in the classroom, he befriended a person by the name of Eduardo Saverin. Saverin would later become one of Antler’s earlier investors. 

But knowing the folks who were antagonists in The Social Network was as close as Grimeland got to the Zuckerberg phenomenon. Meta – then known as TheFacebook – had just taken off, and was the hottest thing on campus at that time. Although Mark Zuckerberg was hiring interns from Harvard as fast as he could, Grimeland didn’t have the time to sign up: he was juggling classes and athletics and had to care for his infant son. "I was close to applying for one of their internships. They more or less hired anyone in the early days," said Grimeland in an interview earlier this year with Forbes. "I think anyone who took those internships is incredibly well off right now". 

In his last year, McKinsey came knocking, and Grimeland accepted a job with them. It was a no-brainer for him: it came with prestige, a nice salary to pay off tuition loans, and a chance to work with some of the smartest people in the world. His next five years would be spent covering the TMT sector, working on projects ranging from semiconductors in Taiwan to consumer electronics in Europe and telecoms in India. 

This was a formative experience for Grimeland. At Harvard, he had cultivated an interest in high growth tech companies and wanted nothing more than to study them. McKinsey provided him this opportunity. But advising executives on how to manage their companies started to become dull - Grimeland wanted to build his own. 

Rocket Internet

That opportunity would come as Grimeland began searching for his next career move. 

Through conversations with investors at Rocket Internet and Kinnevik, Grimeland learned of the opportunity in e-commerce. Zalando, the European version of Zappos, had grown rapidly, and the common belief was that a similar model would work in Southeast Asia. A launch team was needed, and Grimeland was offered the chance to sign on. 

It was a perfect match. In Rocket Internet, Grimeland found an organisation that treated business operations as a science that could be perfected. As Mario Gabriele writes in one of his best pieces:

“It’s as if McKinsey competed in the porn industry.” That’s reportedly how Oliver Samwer described Rocket’s goals in the fashion industry to one of the firm’s early founders. The point he sought to make was that Rocket could win by out-analyzing its competitors. Industries like fashion were dominated by artists, not business people. […] 

This anecdote gets to the heart of Rocket’s playbook: great companies are built analytically, systematically, from the top-down.”

And in Grimeland, Oliver Samwer and Rocket found an ambitious overachiever who was looking for something new. From the same piece by Mario over at The Generalist:

“The typical profile was a young business school graduate, fresh off of a two-year stint at McKinsey. Looking for greater responsibility, these “insecure overachievers” flocked to Rocket, enticed by the chance to have a project of their own and be a “founder”.

It was a running joke: if you were a young consultant or investment banker in Europe, chances were you received a LinkedIn message from one of the Samwers’ lieutenants, extolling the virtues of working at Rocket. That was the first step in a masterful recruiting operation that ensured that the incubator's leaky bucket was constantly refilled.” 

Grimeland joined Rocket Internet as Co-founder and Managing Director of the entity known as Zalora. He would be in charge of launching the platform in new markets, and spent most of his time shuttering from one country to another. This was more difficult than expected. Unexpected challenges such as the lack of an existing logistics network and low credit card penetration in the region made growth difficult. Fortunately for the Zalora team, they managed to ride the mobile wave and were able to command a sizable market share by 2016.  

When the company was restructured and rolled into Rocket’s holding company Global Fashion Group in 2015, Grimeland became Group COO and oversaw other regional companies such as Dafiti (operating in Latam) and Lamoda (operating in CIS). Unlike other co-founders and MDs who effectively got a demotion, this was a step up. Yet, Grimeland wasn’t content enough to stay within the Rocket ecosystem. 

Something had been bugging him for a while. Many of the executives he worked with didn’t have enough skin in the game and acted more like employees than owners. As an incubator, Rocket typically took 80-90% of the company and split the rest between the co-founders. It became clear to Grimeland that these individuals were better off starting a new company (as several of his colleagues had gone on to do) and that their talents were severely underutilised. 

Antler would become this vehicle for enabling entrepreneurship. Although capital was the common ingredient that entrepreneurs seemed to always lack, Grimeland also identified the lack of a network as the other shortage in startup ecosystems, especially in developing ones. Without potential co-founders and access to capital, it was too risky for exceptional individuals to even try their hand at starting a company. 

The founding team that Grimeland put together seemed to reflect this belief. “The biggest competition for us wasn’t other investors in the venture space, but the big corporations that were attracting and retaining talent with really high compensation”, said Medbo. 

With impressive banking and consulting backgrounds, it’s not hard to imagine that Medbo and his team understood what that was like. Take a look: 

1. Magnus Grimeland (CEO): 2 years with the Norwegian Navy SEALs > Harvard > 6 years at McKinsey > 4 years with Rocket/Zalora

2. Fridtjof Berge (Chief Business Officer) - 3 years at McKinsey > Harvard MBA

3. Dilan Mizrakli Landgraff (first CFO, now Chief Strategy/People Officer) - 4 years doing investment banking with JPMorgan > 6 years in private equity

4. Vegard Medbo (first Chief Commercial Officer, now COO) - 2 years with the Norwegian Coastal Rangers > 5 years at McKinsey

5. Jussi Salovaara (Managing Partner, Asia) - 5 years at McKinsey > 4 years at Nokia running a variety of business units

The team is impressive on paper. And impress aspiring founders it did.

Over 1,500 applications came in for the first Antler Singapore cohort in 2018, even though the team was expecting no more than 300. 62 founders would be selected from this applicant pool, who would then go on to form 13 companies. This was the pent-up entrepreneurial energy that the team had been counting on, and they would never look back. 

Program

Antler’s promise to founders is simple: if you get in, you’ll join a 3-6 month program that’s divided into two phases. In phase one, you get a stipend. And if your pitch is good, Antler will invest so you can continue building in phase two. Exact details vary from location to location, but they generally follow a similar structure. 

Sourcing

For Antler, everything starts with ensuring that there’s a pipeline of individuals who could be formidable founders.

This means identifying those who have 7-10 years of work experience, with some of that preferably spent at startups. Credentials from elite institutions are looked upon favourably, and so are advanced degrees in STEM fields. Where non-technical founders are concerned, backgrounds in consulting and investment banking are advantageous.

It’s oddly specific, but as with everything at Antler, recruiting is more science than art. These filters are a result of extensive research on successful startup founders, whether from academic literature or Antler’s own data. By sticking to what has been proven, Antler hopes to ride the law of averages and gain an advantage over time. 

The most qualified applicants typically come through referrals, but Antler also keeps its own lookout for talent. From LinkedIn cold outreach to organising network events, Antler's scouting team does its best to identify talent. “We spent a lot of time trying to get the right people to apply. We had a few very efficient tests early on to reduce the volume [of applicants] in the later stages", said Berge. 

Selection

At the selection stage, Antler looks for individuals with a ‘spike ’– deep expertise in their fields of work or a specialised skill that sets them apart from the rest. This happens through several stages, although it varies based on location: 

1. General application: an indication of motivation in the candidate’s  CV 

2. General aptitude test: a series of logical puzzles and common questions to establish baseline competence

3. Competency interview: the same one used by HR teams to determine if an applicant has the traits the company is looking out for; here Antler looks for evidence of drive and creativity in problem solving

4. Case study: an interview with a partner designed to tease out the candidate’s ‘spike’, from technical ability, business acumen, to domain expertise

5. Final interview: a catch-all interview for local Antler program partners to determine if the candidate is a fit

Some have commented that the business domain questions resemble the type you’d get in consulting interviews, which would be quite in character, since the founding team is composed of consultants, bankers and MBAs. Others note that there seems to be little focus on software engineering, even though most of the companies started are software-based. It’s a point that we’ll come back to later, but suffice to say, the filters used for candidates don’t seem to be appropriate for founders from technical backgrounds. 

By the time selection is done, only approximately 3% of applicants will be selected, comprising a good mix of technical and non-technical talent. 

Building

Once applicants are admitted, they go through a two-phase program that spans three months each. A small stipend is given during this period to relieve any existing financial pressures so that founders have the time to explore. 

In the first phase, founders meet potential co-founders and explore different business ideas.

Antler facilitates this process by organising “sprints”, where participants work with others in a group to identify solutions to a given problem statement. The goal is not just for founders to flex their entrepreneurial muscles, but also to figure out quickly who they can and cannot work with. Founders are encouraged to form teams where they have similar interests and complementary skills; in an ideal world, an MBA/consultant/banker would team up with a FAANG engineer. This, however, can be quite difficult, since the interests of financiers and builders can often vary significantly. 

Additionally, founders also attend masterclasses. These can be eye-opening for those who have no financial or investment knowledge.

How does a company scale? How can it be less CapEx heavy? Is there a large enough TAM for a venture business? These are some of the questions commonly posed to founders. Antler’s role here is to steer founders away from potential pitfalls rather than provide any silver bullets, which is an arguably wise operating philosophy. As Charlie Munger once quipped, “avoiding stupidity is easier than seeking brilliance”.

It is also revealing of Antler’s investment philosophy. 

Unlike YCombinator, which has funded companies building supersonic jets and fusion power plants, Antler doesn’t leave much room for the crazy and implausible. Anecdotally, the ideas which are most likely to get funded are those which have business proven models (think Grab as the SEA version of Uber). Of the 400-odd companies that Antler has funded, the most funded verticals (as described by Antler) are SaaS (51), FinTech (46), and health tech (30).

This makes sense. Because pre-seed investments are already so risky, Antler has to remove every other unknown in order to allocate funds responsibly. Asset-light plays and “hot” sectors such as fintech and web3 give founders more room for error, and assures investors that every dollar they put in goes a long way. Founders who have formed teams and settled on an idea go before an investment committee, which decides whether they will receive funding and move to the second phase. The cohort culminates in a demo day, where founders pitch to investors and hopefully close their seed round. Not all are successful, but this is as good as it gets for a founder who wants guidance from the inception of their company to receiving their first check from VCs. 

In the end, it’s all down to a numbers game. And the funnel is how Antler makes it work. 

The Model

Markups and Returns

Antler might be a partner to founders, but it’s first and foremost a venture fund that needs to earn returns for LPs. Running cohorts at the pre-idea stage is merely a form of proprietary deal sourcing and a way for Antler to get a first look at a company (however little and thin that might be) before other investors. 

This can be a great business, and there’s no better evidence of this than YC. In Thirty Minutes or Less, Mario Gabrielle writes:  

“A favorite pastime of VCs at Y Combinator is to complain about Y Combinator. Perhaps it’s because YC has built a top-3 fund, without even playing the game. What other investor is able, not only to back active competitors, but to do so in the same class? How many get to dictate terms, and in some cases, have startups lining up for the privilege of a round that undervalues them? Who else so reliably secures mark-ups within a mere 3-month period? How many funds turn portfolio founders into zealots? There are other accelerators and incubators, but YC is in a league of its own.” 

Antler obviously isn’t like YC. For starters, the two host startups at different stages of their lifecycle, with Antler typically being first check-in and overseeing the formation of the company. YC, on the other hand, receives applications from founders who typically already have a working product and raised some seed or angel funding. Then there’s the elephant in the room, which is how YC has a gigantic lead over Antler, with its portfolio of companies worth over a staggering US$400 billion. 

Yet Antler has already seen some substantial mark-ups amongst its portfolio companies after running cohorts for four years. For example: 

• Xanpool, a peer-to-peer payments infrastructure provider that was part of Antler’s SG2 cohort, raised US$27 million last year in its Series A round

• Homebase (SG3), a Vietnam-based proptech startup that makes home ownership more accessible, raised a mix of US$30 million in debt and equity

• Reebelo (SG3), a refurbished electronics marketplace, raised US$20 million in their Series A earlier this year

• Volopay (SG4), a payments and card issuance provider, raised US$29 million in their Series A, taking their combined funding raised to US$31 million

These numbers aren’t eye-popping considering that 2021 has been a record year for venture. But it’s important to note two things. First, these startups aren’t based in the US, which significantly dents their valuation multiple. Second, Antler’s standard terms are 100K for 10% of the company. If we assume that the investment is made out of a small seed fund, each of these companies would have returned the fund entirely. That’s outstanding. 

Since raising its new fund this year, Antler has also gone ahead to invest in companies that have not been part of its cohorts. This is a tad unusual for accelerators, but perhaps demonstrates that Antler aspires to eventually become a global VC firm which includes running cohorts as one of the many ways it sees deals. 

In March, it co-led UK roll-up firm Wholesum Brands’ US$50 million Series A (35 million in debt). And two months ago in May, it participated in Dubai-based spend management platform Pemo’s US$12 million seed round. If Antler continues deploying at this pace, it might mean that they’re experimenting with a different fund strategy. It’s anyone’s guess what this means for their pre-seed cohort investments. 

Operating Structure

A key reason why Antler has been able to scale so quickly is because of its decentralised structure. The program in each Antler location moves independently of the others, which means that there are cohorts constantly running and portfolio companies emerging all the time. 

Antler achieves this by hiring local partners to run operations. In contrast to programs like YC and On Deck, which have group partners that offer general advice, Antler is able to tap on a partner who typically has experience as an operator or investor in that specific geography. This can be extremely helpful in geographies where the startup ecosystem is underdeveloped. Having a local partner as a mentor makes it easier for founders to put frameworks that have been refined in Silicon Valley into practice. 

But operating in such a manner means that Antler’s back office can be a little complicated with multiple regulatory structures to contend with. To smoothen this process, Antler operates multiple funds, with each fund typically having a local mandate. This makes the US$300 million raised last year seem small since it’s spread over several funds, but given Antler’s small check size, it’s likely that each program will have enough runway to demonstrate to LPs that they’re worth the investment. 

One challenge that Antler hasn’t seem to have figured out yet is to ensure that each and every one of their programs delivers sufficient value to founders. In many locations, Antler requires that the companies it invests in pay a program fee to cover the operating cost of the cohort. This sum can often be significant, and represent several months of runway for a lean team. In other locations, however, the terms are more generous. 

Unlike YC, which offers a standard YCombinator deal, the complexity of Antler’s terms means that founders who apply to Antler must decide for themselves if a certain program is worth the equity they’re giving up. Some of these terms can be particularly onerous: a founder in Vietnam will not like his deal when he sees what he can get in the US. It remains to be seen whether the best founders are willing to accept that.

Future of Antler

So far, the Antler experiment seems to be working. Indeed, it’s even the subject of a HBS case study. But will this model work at scale? Can it generate superior returns over the long term? These are the questions we must answer. 

Founders 

Any analysis must begin and end with the founders who join Antler. They are the company builders and ultimately the ones who determine how successful portfolio companies become. To generate superior returns for their LPs, Antler must be able to continuously attract the most talented individuals and partner them on their startup journey. 

Why would founders join Antler? We can start with the obvious. Like other accelerators and incubators, Antler provides guidance on company building, ranging from designing a minimum viable product (MVP) to go-to-market strategies. The network that founders can tap into also solves two other crucial needs when going from zero to one: (1) finding another co-founder and (2) getting early interest from investors through demo day. Founders aren’t guaranteed success by going through Antler’s program – many fail to form teams, much less secure investments – but they get substantially better odds than going it alone. 

Founders also get an ecosystem to connect with others. Being part of a common portfolio makes them more likely to share information, trade tips, and  make introductions to other partners in the ecosystem. Venture firms have long fostered collaboration between their portfolio companies, with John Doerr of Kleiner Perkins even going as far as to call their network a keiretsu, a nod to how Japanese companies are often networked together with a sense of mutual obligation. For B2B companies who sell to SMEs and other startups, this can be a godsend. 

But perhaps Antler’s most significant contribution to enabling entrepreneurship is derisking the founding of startups, and not necessarily in a financial sense. Antler might provide a stipend, but this amount has come down over time. Founders that are part of the Singapore cohort used to receive S$12,000 over the 3-month exploratory phase of the program, but now only get S$3,000 spread over 2 months. It wasn’t much for a professional then, and it’s even less now. 

What being part of an Antler cohort does is to allow exceptional individuals to take a crack at startups while being on a “tracked path”. For professionals who are used to climbing corporate ladders and scientists who are used to academia, this structure creates a psychological safety net for them to become founders. Being an entrepreneur shifts from “trying something crazy for the next 6-12 months” to “working with a global VC firm to build a new venture”. That makes it a lot easier to take the plunge in countries where risk-taking and failure are not well tolerated. 

As Antler continues to grow, each of these reasons for joining Antler will only get stronger. There’ll be more Antler partners to run office hours, more investors interested in Antler companies, more startups in the Antler ecosystem to sell to, and more prestige in being part of the cohort. In turn, more exceptional individuals will want to build a startup with Antler and so on. There’s a flywheel here, and it’s starting to spin quickly. 

Terms

It’s not all a bed of roses. In an article last year that reported on Antler’s new fund raise, Mike Butcher wrote on TechCrunch that several have called Antler’s terms for startups “less than founder friendly”. Grimeland acknowledged that it might have been the case “in the early days”, but argued that they’ve now gotten “very good feedback” and they’re “very competitive in all the markets that [they’re] in”. 

It’s hard to know what those terms are and whether they are indeed competitive but price might be a good indicator. At US$150,000 for 7% of the company, Antler’s US program offers the best standard deal, giving a startup an implied valuation of US$2.1 million. Yet, this is far below market.

Data from Cendana Capital, a fund-of-funds manager, shows that the median pre-seed valuation is close to US$6 million. Granted, this data is drawn from companies which are primarily based in the US, which doesn’t make for the best comparison against Antler’s more international profile. Still, we can make a number of observations. 

First, Antler’s deal for US founders is at a 65% discount to the median valuation. Some allowance should be given since there are costs for running a cohort, but even if we value operational expenses at an additional US$50,000, that’s still more than a 50% discount to the valuation it invests at. 

Second, founders outside the US face even tougher terms. Antler’s Vietnam program, for example, gives its startups an implied valuation of US$417,000. Even if we slash Cendana’s 6 million figure by half (thus setting it at US$3 million) to account for the poorer market conditions in Vietnam and tag on another US$50,000 (thus totalling US$100,000) to Antler’s investment to account for operational costs, Antler’s still investing at a 70% discount to median pre-seed valuations. 

To be fair, Antler isn’t the only one which has caught flak for such terms. Earlier this year, Bolt CEO Ryan Breslow started a conversation around YC’s standard deal, which now sits at US$125,000 for 7%. This is worse than Antler’s US deal, especially when you consider that Antler takes a lot more risk by investing at the earliest stage possible. YC however, can afford to do that because of immense influence and prestige; Antler on the other hand still has some ways to go.

Perhaps a more reasonable expectation would be for Antler to match YC’s price terms as a baseline. This seems roughly fair; while Antler comes in at an earlier stage and takes on more risk, YC creates more value for founders in terms of valuation uplifts and talent acquisition. It’s certainly preferable to benchmarking against angels in less developed ecosystems which offer more onerous terms, and not just in a moral sense. As Paul Graham says:     

“Don't spend much time worrying about the details of deal terms, especially when you first start angel investing. That's not how you win at this game. When you hear people talking about a successful angel investor, they're not saying "He got a 4x liquidation preference." They're saying "He invested in Google." [...] 

When angels make a lot of money from a deal, it's not because they invested at a valuation of $1.5 million instead of $3 million. It's because the company was really successful.”

Antler might benefit from taking Graham’s advice. As a firm which invests pre-product, Antler is arguably more like an angel than the traditional VC firm it seeks to become. Building a successful company requires great founders, and great founders will only partner with institutions who offer them good terms. 

The last thing Antler wants is to have an adverse selection problem where only founders without better options come to them. If that happens, we can expect a death spiral: 

1. Less companies succeed; in response, 

2. Antler gives more onerous terms to make the economics work; thus

3. Attracting less talented founders; which in turn

4. Causes less companies to succeed.  

That would be a shame. 

Culture

I once asked an Antler founder the best way to get selected. He replied that the best way was to first work at a startup and gain domain knowledge. “Otherwise, you’ll end up with a consultant leading your company”, he concluded. 

This focus on founders with business backgrounds is something that is frequently mentioned. Of the 38 partners listed on Antler’s site, only seven have a technical background, with the majority having worked in consulting or banking, with some operational experience. There’s nothing wrong with this – after all, startup advice is more business than engineering - but it does suggest that Antler’s culture will draw in more founders from certain backgrounds. 

You can see this in YC, whose founding team was composed mainly of hackers who were deeply technical. Other technical founders noticed this and were drawn to them, which in turn further attracted other technical founders. Today, it’s hard to miss that YC has a culture that focuses on builders. Almost everyone who has been through YC has a “build something people want” sticker stuck on their laptop. 

Does Antler need a culture more focused on builders? I don’t have the answer. But tech talent has never been scarcer, and they are the ones who are likely to benefit more from Antler’s guidance. Sentiment is a hard thing to track, but my guess is that this could determine whether Antler’s model remains sustainable. 

Competition

Antler isn’t the first accelerator, and it most certainly won’t be the last. Many have tried and failed; of those who remain, each has a unique edge to them. 

The Predecessor

Founded in 2011 by Matt Clifford and Alice Bentinck, Entrepreneur First (EF) is Antler’s true predecessor. It runs 3-month long cohorts and gives founders a stipend for attending. Precise terms vary based on location, but EF invests between $54,000 and $98,500 for 10% equity. Clifford summarised the firm’s thesis as follows: 

“We think you should start a company with a stranger. When we look around the world and ask, “Why aren’t there more great companies?”, we think the obvious answer is: because many of the world’s best potential founders don’t have a world-class cofounder in their personal network.”

This model was a lot more foreign a decade ago, but it has proven to work. EF’s portfolio is now worth over US$10 billion, and the Antler team is no doubt using this as a benchmark for what they could do. In this regard, EF might be more of an inspiration than competition. After all, EF has its roots in Europe and remains concentrated there while Antler started first in emerging markets and has now gone global. 

Community for top talent

A newer challenger is On Deck. It has two main offerings for founders, namely, On Deck Founders (ODF) and On Deck Accelerator (ODX). 

In ODF, founders get a remote-first program centered around community and support. Through fireside chats, workshops, and Slack channels, founders get to build a network that spans the entire tech ecosystem. And in ODX, founders get a traditional accelerator style program which offers US$125,000 for 7% equity. This, however, appears to be discontinued as a result of the economic downturn. 

Given that On Deck is still refining its business model, it's hard to count it as a direct Antler competitor. But its community-first approach is worth a second look. Since the inception of ODF and ODX, 2,500 individuals have participated, leading to the founding of 650 new companies. This has created a total of US$9 billion in company value, which is remarkable given that On Deck is itself a Series A startup. It'll be interesting to see what happens if ODX becomes active once again.

The OG

Then, there’s YC. A lot has been said about them, but what’s worth emphasising is that they’re not done evolving. Earlier this year, they started offering a new standard deal. Besides investing US$125,000 for 7% equity, YC now offers founders an optional $375,000 on an uncapped SAFE with a “Most Favoured Nation” (MFN) clause. 

YC has said that they did this for two reasons. First, founders can spend less time fundraising and more time building their companies. Second, founders now have more leverage since they now have a longer runway. And while the new deal does help founders, some investors have commented that it's also a means for YC to take a bigger piece of its portfolio companies. 

Antler can learn something from this. Raising funding at the pre-seed stage is hard, and its founders often struggle. Companies like Volopay and Homebase have gone on to take part in YC after going through the Antler program even though it meant diluting their founders. It's not clear whether they did it voluntarily but it underscores the difficulties that founders face. If founders still need to go through another accelerator program to raise capital, it raises the question of how useful Antler is. 

That said, Antler may yet find an edge in the emerging markets. When would-be founders don’t speak English, it’s difficult to access all the various institutions within the startup ecosystem. Going directly to them, as Antler has, may be the answer. 

The Big Boys

Last but not least, there are the mega venture funds. As winning deals have become more difficult, certain firms have responded by moving upstream in search of deal flow. 

Sequoia, for example, runs Surge and Arc. Surge is an accelerator program targeted at Southeast Asian and Indian founders, while Arc is meant for European and American founders. Companies apply to a program, and if they’re accepted, receive between US$1 to US$1.5 million in investment. Similarly, a16z and Accel have also hopped on this trend with START and Atoms. Although these programs don't involve cohorts, they do offer mentoring and investments of up to US$1 million and US$250K respectively. 

This trend is unlikely to pose a threat to Antler. Although Sequoia and a16z might be brand name investors offering  better terms, it’s likely that their programs will remain small and exclusive. When you manage billions of dollars, there are easier ways to generate market-leading returns. 

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Antler is still in its early days. Despite opening its doors in over 17 countries, many of its cohorts are still in its first or second iterations. We’ll have to see if this model can be replicated in every geography. 

What Antler has done is to provide a structure for entrepreneurship. There is no myth or magic to starting a company, only data and refined SOPs. And if someone decides to join Antler, there’ll be handrails for him to hold onto as he begins the journey of building a company.

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Thanks to Trevor and Kristofer for reading drafts of this.