Taavet Hinrikus on Venture Incentives and Europe’s Technology Ambitions

Wise co-founder and Plural partner Taavet Hinrikus talks with Harry Stebbings about early-stage investing, fund incentives and European technology. His views come from an investor with direct interests in companies and sectors discussed throughout the interview.

Hinrikus began angel investing while working at Skype and building Wise. After stepping back from running Wise, he says he made 30 to 50 investments a year; although he describes the portfolio as successful, the high-speed process felt less connected to his mission.

He recalls missing Bolt’s seed round while busy building Wise, then buying secondary shares around 2017. He identifies Bolt as a significant personal investment, so his comments about its outcome are those of a holder rather than an independent assessment.

Plural emerged from a desire to involve people with the experience of building companies in early-stage investing. Hinrikus distinguishes that approach from both high-volume angel investing and later-stage investments driven more heavily by existing financial metrics.

His criticism of “spreadsheet” investing concerns applying standard financial models to established companies and paying high prices to win. He acknowledges that such companies still need capital and that there is nothing inherently wrong with supplying it; it is simply not the work he finds most compelling.

At an early stage, he looks for the founder’s motivation and a distinctive ability to build something important before product-market fit is obvious. He believes operating experience can help a partner understand a founder’s challenges, but says time will tell whether it also produces better investment results.

Hinrikus recalls useful conversations with founder-investors when Wise was raising money, including Max Levchin and Ben Horowitz. At Plural, he says, all five partners have built companies and hope to offer the perspective of having faced similar decisions.

He says Plural backs ambitious entrepreneurs across a range of sectors, citing portfolio examples including Proxima Fusion, patient-monitoring company Teton and defense company Helsing. These examples are investments or portfolio relationships, not neutral endorsements.

Hinrikus likes repeat founders because, in his experience, they often pursue a bigger goal on their next attempt and bring lessons from the first company. He does not claim that repeat founders have a proven higher probability of success.

Asked whether wealthy investors make better decisions, he shifts the question to alignment: are they investing their own money alongside outside capital? He believes personal financial exposure changes the relationship between the investor, limited partners and founders.

Hinrikus criticizes a management fee of around 2.5% as insufficiently tied to outcomes. He says Plural charges about half that rate and expects lower fees to free capital for additional investments; his estimate is a description of his own firm’s model.

He argues that the team should be rewarded substantially when it returns capital, rather than simply for deploying it. He cites employee stock options at Wise as an example of sharing upside, saying early customer-support employees made significant money when the company went public.

Stebbings asks whether long waits for distributions make the model harder. Hinrikus agrees liquidity is a concern, particularly in capital-intensive companies, and argues that reaching milestones can create secondary-market opportunities even before an IPO.

Wise began in 2010 and listed in 2021; Hinrikus says some private liquidity was available in its last few years before listing. He suggests difficult market conditions can stretch deep-tech journeys and that investors may sometimes need to return some capital earlier.

Plural’s partners are collectively the largest investor in their fund, Hinrikus says, and the lead partner also writes a personal check for each deal. He declines to give the percentage and says the extra amount varies with each person’s circumstances.

He identifies another potential conflict: a founder may want to build for decades while an investor needs liquidity sooner. Being clear about time horizons matters even when everyone initially agrees about the opportunity.

Moving from operator to investor also exposed him to portfolio construction. He says Plural follows ambitious founders across sectors, but understands why a fund might decline another attractive deal if too much of its capital already depends on one market.

Fund one was modeled for about 25 to 30 investments and ended up with 31. Hinrikus says it reserved less than a third for follow-ons; the second fund aimed for roughly half, likely slightly less, while the firm continues learning how to allocate reserves.

Stebbings dislikes automatic pro-rata investing, while Hinrikus says the real decision is more complicated: a follow-on has financial consequences and may also send a signal to the market. Plural is still working on a consistent approach.

Hinrikus promises to support founders through difficult periods, but not to fund every subsequent round. Plural tells founders it seeks very large impact, and if a business is no longer on that path, support does not guarantee another check.

For a new investment, each partner has a limited number of deals per year and must be willing to commit personal money. The lead writes a memo explaining why the company matters, why the founder is suited to it, and how it could plausibly produce a 100x outcome.

The 100x threshold is an imagined upside scenario used in selection, not a forecast or promised return. Hinrikus says other investors may sensibly pursue lower-multiple opportunities, but Plural has chosen a different strategy.

The partnership discusses the memo in an investment committee, but does not vote on new deals. The lead partner considers the feedback and decides; Hinrikus estimates that many proposals change or stop after discussion, without presenting a formal measured rate.

Not every partner needs to meet every founder, he says. Plural tries to bring colleagues into the discussion early and trusts its partners to exercise judgment, rather than requiring every investment to receive unanimous permission.

The firm can act quickly when needed, but Hinrikus wants founders to know how long the process will take. He recalls making personal losses on some hurried 2020–2021 investments and is wary of deals driven entirely by momentum.

Follow-on decisions use a different process: the lead proposes the investment, but the partnership votes by majority. Hinrikus says reserves are a finite shared resource, so the decision must consider the whole portfolio rather than only the lead partner’s preference.

He questions the value of standard early-stage liquidation preferences for an investor seeking very large upside. He also recognizes that the economics can differ where a company has raised much more capital relative to its eventual valuation.

Hinrikus says Wise raised about $160 million of primary capital and burned approximately $100 million, even though a much larger total was sometimes associated with its fundraising. Primary proceeds to the company, secondary share sales and eventual company valuation are different measures.

He is skeptical of boards that expand to include an investor from every round, leaving many people with similar perspectives. A more balanced board, he argues, can provide more useful advice to the founder.

Founders should protect their ownership, Hinrikus says, but should also consider who will answer the phone when things go badly. An attractive price and a crowded financing round do not necessarily ensure meaningful help later.

Stebbings argues that large multistage funds can make many early bets to gain options on future rounds. Hinrikus predicts founders will come to recognize that an early check from such a firm is no guarantee of follow-on funding; this is his competitive view as an early-stage investor.

He believes capital can be excessive in fashionable categories, even while other companies struggle to raise. He also predicts that median venture returns may fall as the asset class grows, though the strongest investors may continue to perform well.

Plural’s stated goals include European sovereignty and economic impact. Hinrikus says the war in Ukraine and changes in the US–Europe relationship strengthened his view that Europe should build more of its own defense, space, energy and security capabilities.

He sees a risk in dependence on foreign-controlled critical systems, including who can access information or switch a service off. Stebbings challenges where such a boundary could be drawn in an interconnected economy; Hinrikus expects some decoupling but hopes Western cooperation can improve.

Hinrikus argues that public funding and procurement can support European capabilities, but implementation must move faster than traditional cross-border programs. His figures for proposed German funding are conversational estimates, not a verified accounting of approved or spent money.

Asked about Russia’s intentions beyond Ukraine, Hinrikus says he believes Europe should prepare for another potential conflict in the coming years. That is a security judgment and prediction, not a confirmed plan or inevitable event.

He believes European companies can make significant progress quickly if the right capital and talent are available. He cites Helsing and The Exploration Company, where Plural has investment interests, as examples supporting his argument.

For Europe’s startup ecosystem, he calls for early deep-tech capital, greater ambition and a less fragmented market. While he says strong entrepreneurs find ways around obstacles, he also supports regulatory and institutional changes that make building across borders easier.

Hinrikus says he does not regret Wise’s London listing and does not believe a US listing would necessarily have produced a premium for that company. He nevertheless sees structural weaknesses in UK retail and pension-fund participation; these are his judgments, not a controlled comparison.

On liquidity and money, he says he sold Wise shares systematically only after the company reached a multibillion-dollar valuation and also benefited from Skype stock options. Financial independence, in his telling, made it easier to focus on what he wanted to build and support.

His policy priorities include more deep-tech funding, encouraging entrepreneurship, reducing regulatory friction and making government a stronger customer for European startups. As a partner at Plural and an investor in some of these sectors, he has a financial interest in this agenda.

In quick-fire questions, he credits Estonia’s education and Skype’s early success for helping develop its startup ecosystem. He points to Revolut, Wise, Monzo and Spotify as companies that may help produce future founders, without claiming a definitive ranking.

Hinrikus says he has become more optimistic about Europe and highlights his early personal investment in Synthesia alongside Bolt. His hope for Plural is to help create trillion-dollar European companies within ten years: an aspiration and prediction, not an achieved result.