Kindred Capital’s Equitable Venture Model: A Game-Changer for European Startups
London-based venture capital firm Kindred Capital has cemented its position as a pioneer in early-stage investing with the recent close of its £81 million second seed fund. The firm, which focuses on European and Israeli startups, has already backed 29 companies from its first fund, including autonomous vehicle software developer Five, SaaS e-commerce platform Paddle, and digital will service Farewill.
What Sets Kindred Capital Apart
Kindred’s innovative “equitable venture” model fundamentally changes the traditional VC-founder relationship. In this unique approach:
- Portfolio founders receive carry in the fund
- They effectively become co-owners of Kindred
- After LPs and partners recoup investments, founders share in subsequent profits
Investment Philosophy and Founder Focus
Founder-Centric Approach
“Everything starts with the founder,” explains partner Leila Rastegar Zegna. The Kindred team prioritizes understanding founders as people and leaders, assessing:
- Ability to launch and scale a company
- Resilience through startup challenges
- Capacity to drive significant outcomes
Market and Timing Considerations
Kindred evaluates:
- Market size and growth potential
- Business timing, especially for market-creating ventures
- Founder-market fit (not just product-market fit)
“Different markets require different skills and personality types,” notes partner Chrys Chrysanthou. “We look for founders with deep insights into their specific problems.”
Adapting to a Post-Pandemic World
Remote Deal Sourcing
The pandemic accelerated digital transformation across industries, including VC:
- Transitioned to video calls initially
- Now optimizing communication methods (Zoom, phone, in-person)
- Developing new workflows based on first principles
Sector Resilience
While maintaining sector-agnostic flexibility, Kindred observes:
- Continued strength in Future of Work investments
- Resilience in millennial-focused businesses like portfolio company Pollen
- Ability to pivot to emerging opportunities
The Equitable Venture Model in Practice
How It Works
- 20% of fund carry allocated to the “Collective” (founders and advisors)
- Equal shares regardless of investment size or company outcome
- Five-year vesting period (with “good leaver” provisions)
Proven Benefits
- 38% of deal flow comes from entrepreneur referrals
- Creates powerful network effects
- Aligns incentives across the portfolio
“If the model didn’t work, we wouldn’t have continued it in Fund II,” Rastegar Zegna emphasizes.
Commitment to Diversity and Inclusion
Kindred walks the talk on diversity:
- 50% female team members (vs. 30% industry average)
- 67% female advisors
- 16% portfolio companies with women CEOs (vs. 6% average)
- 12% with BAME founders
“Diverse teams simply get better results,” states Rastegar Zegna. The firm has implemented:
- Diversity tracking since inception
- “Working sessions” to assess real problem-solving skills
- Regular D&I workshops with experts like Meri Williams
The Future of Equitable Venture
While Kindred has pioneered this model in Europe, Chrysanthou notes: “Someone had to be first. We hope others will recognize the benefits of this fairer approach to venture capital.”
The firm continues to prove that aligning incentives between investors and founders creates stronger portfolios, better networks, and ultimately, more successful outcomes for all stakeholders.
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