How Design VCs Spot Unicorns, The Growth Equation, and Why Great Products Fail With Andy Budd
How pragmatic design is accelerating the world's leading startup unicorns
Watch Time: 1hr 20 mins
Hey friends,
Just got back from Switzerland and I’ll share more about that in the essential bytes this Wednesday. :) I had a great time. Lausanne is a beautiful city and I made some great new connections with Founders and VCs.
I came across Andy Budd and his background immediately intrigued me. Andy is a design leader turned VC and startup advisor at SeedCamp (pre-seed fund). He ran an agency for 15 years. The company is now employee owned, which allowed him to pivot towards investment and coaching design leaders. We chat about the unique advantages designers bring to Venture Capital.
Andy shares how his UX background helps him evaluate product-market fit, why designers often misunderstand the "Field of Dreams fallacy," and practical fundraising strategies for founders.
Discover when startups should hire designers, how European and American VC landscapes differ, and why the best product doesn't always win. Whether you're a designer considering VC or a founder looking to raise capital, Andy's experience transitioning from designer to investor offers valuable perspective on connecting product value to business growth.
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“A first time Founder is fixated on product. A second time Founder is fixated on delivery."
— Andy Budd
Sera’s Notes ✏️
Product people understand user needs. When you consider investing, it’s good to understand who would use that, ICP, customer needs, empathy, etc. Once you make an investment, you want to help the Founders be as successful as possible, get to PMF and grow.
There are not many designers who have moved into Venture Capital. Irene Au, Andy’s friend has written a book on designers in VC.
Andy was an entrepreneur in residence for 6 months at VC fund, Seedcamp. At the end, they invited him to become a venture partner, which is a paid role for 2 days a week. There are 9 people at Seedcamp.
VC roles tend not to be advertised. A lot of it is network. It’s about trust and relationship building. Bonus if you’ve come from a good startup.
There’s more capital in the US than in the UK and Europe. It’s also more expensive. Education, health care, etc. costs a lot more in the US so teams must be paid more. In the EU, they focus more on capital efficiency and traction. EU may value reputation more when it comes to VC. They are focused on managing downside.
In the US, it feels like everyday something new is happening and that inconsistency is scary for investors and founders. This may lead to more startups staying in Europe instead of pursuing a pathway to the US.
What Founders value about Andy’s background as a designer is the ability to speak to whether or not the product will connect with the audience.
Sera initially approached investing much more focused on the product and realized she needed to take a step back and focus more on if the Founders were the right fit, the timing, and the market entry plan.
As a new investor, Andy discovered the value of what the VC has seen historically. This allows the VC to see patterns. It’s less about the quality of the idea and more about ‘is this the right team to execute?”
Many designers fundamentally believe that the best product on the market will win, but Seedcamp has seen dozens of times the superior products fails. Clunky products succeed because they have the right product suite, the right distribution channels, etc.
It’s no longer about the technical moat because of AI. The reason people purchase products is more about the product experience. Is it easy to navigate? Does it deliver the value it proports to deliver immediately? Can it be baked into the routine of customers?
Andy would like to say hire designers on day 1, however, his real answer is more practical. In reality, a designer can deliver so much from the backlog, but then there’s a gap of 3-4 months where they don’t have much work, so Andy recommends first hiring a design contractor who can get you up to speed and then step away.
Founders talk to customers but it tends to be problematic customer discovery. However, when customers get it they feel validated and when people don’t get it they tend to ignore the negative feedback.
Andy’s approach with giving design feedback is non-confrontational and requires patience. He gives the feedback and the first time it typically gets ignored. After the Founders still can’t resolve the problem, they’ll come back a few months later searching for how to implement his advice.
Your first growth team may come around Series A to B. You’ll need 3-4 designers. 1 of those could be a growth designer more focused on analytical, behavioral, etc. Prior to that, you’ll want to run sprints. The first way to build a growth team is to start by running sprints. This way you don’t build up growth debt. Growth should sit under product and marketing. This also avoids a battle with growth marketers.
From a VC perspective, there are simple maths that can tell you if a company is right for VC. Half of the companies invested in may not be running in 10 years time. Other companies may be limping along. According to the power law, 1 company that’s doing amazing pays for all of the other companies. VC is about finding rare, big, successful companies.
Bootstrapping is difficult unless you are independently wealthy. You’d need to vibe code and get really lucky quickly. If you’re not a candidate for VC, angel investors could be a potential option for you.
There’s a gap in funding for slower growth business ideas. Before you could go to your bank and get a loan. All of that funding has disappeared. Before you could have put your house up for collateral. Sometimes the only option left is VC. VC can kill really good companies. If you take money from a VC you are committed to building a massive business.
VC will spend no more than 4 minutes on average looking at your pitch deck. If it’s a small fund, it may be the general partners looking at it. At a larger fund, it may be an associate.
A tight timeline is important (6-8 week period). You must consider the season and line up all your calls to create FOMO. If you’re not talking to multiple VCs, then there’s no urgency. You want to have multiple term sheets from VCs and leverage this to negotiate. The market gives the signal.
Seedcamp invests in seed stage. They write checks around 250 - 500m and looks for an 8% allocation. Most investment rounds are selling 15-20%. They often co-lead with another fund. The valuation at this stage is like putting a finger in the wind because they haven’t figured out the unit economics yet.
A lot of VCs come from a finance or legal background. However, these people aren’t the most in touch with the tech world. It’s nice to have a mixed group. Expertise is important in order to spot trends coming.
To get into VC, you can try to get a job as an associate or come in as an operator who worked as a startup. The latter is a little more luck based.
Design for Conscious Product Led Growth
Read my highlights below to get a quick overview and listen to the full episode on YouTube, Spotify, or Apple.
Do me a favor and review the podcast on Apple or Spotify if you enjoy this. ☺️
Chapters 📖
[00:00:00] Introduction to Andy Budd: From Design Agency to Seedcamp VC
[00:01:37] Designer's Advantage in VC: Evaluating Product-Market Fit
[00:04:13] Silicon Valley vs European VC: Capital, Competition, Risk Tolerance
[00:08:15] Breaking into VC: The Unconventional Path from Agency Owner
[00:11:51] The Field of Dreams Fallacy: Why the Best Products Often Fail
[00:15:44] Design as Competitive Advantage: Beyond Technical Capabilities
[00:21:14] When to Hire Designers: Timing Your First Design Investment
[00:30:49] Building Growth Design Teams: Navy SEAL Squads for Startups
[00:37:33] VC vs Bootstrapping: Path for Bay Area vs European Founders
[00:42:06] Fundraising Strategy: Creating FOMO and Timeline Management
[00:52:02] Equity Allocation: Optimal Ownership Strategies for Tech Founders
[00:57:22] What Makes a Great VC: Spotting Trends in London, Berlin, Singapore
[01:04:04] Redefining Success: Beyond Silicon Valley Metrics and Wealth
[01:17:03] Paths to VC: Options for Technologists
Where to find Andy Budd 🔎
Website: https://www.andybudd.com/
Linkedin: https://www.linkedin.com/in/andybudd/
Book: https://andybudd.com/book
Articles from Andy
ttps://andybudd.com/archives/2022/08/crafting-the-perfect-pitch-deck-from-a-vcs-point-of-view
https://andybudd.com/archives/2024/10/why-vcs-turn-founders-down-and-it-s-not-always-about-the-idea
https://andybudd.com/archives/2025/04/why-vcs-say-no-the-real-reasons-behind-the-rejections
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