Limited Partners or LPs, the people or institutional investors who invest their money in venture funds, are pulling away and the European investment climate is going from bad to worse. This is on one hand because of the dismal returns that the funds have generated and on the other hand because of the bloated management fees that some VCs collect without working much for their portfolio companies or for new deal flow.

Even if the general investment climate in Europe is getting darker Seedcamp is determined to make the early stage investing work in Europe. I talked with Reshma Sohoni, CEO of Seedcamp, at the Copenhagen Mini-Seedcamp about Seedcamp’s past, present and future and what value they can offer for startups coming from the Nordics and Baltics.

Seedcamp model is to invest €50,000 in early stage startups in return for some  10 percent of equity. Beyond just the capital, they aim to connect entrerpeneurs with the best mentors across Europe, UK and US.

When asked about whether early stage investing works in Europe, which is very different from US since the European market is a path work of different nationalities, Reshma believes seed capital hasn’t stayd up with the times: Entrepreneurs aren’t staying put but moving to meet the demands of building a global business, but seed capital is still very local.

What Seedcamp really wants to do is to bring the Europe’s best entrepreneurs together with the best early stage investors. This means they have to round up the best early stage investors first. They have started to do this already with SeedSummit that takes place in London and Reshma tells me that they have a big announcement coming on a new initiative to unify the best and the brightest of the European angel community. Reshma also told me that they want to make the Seedcamp model more international and double the number of investment they do from 7 a year to 14 a year. Already this year Seedcamp will expand into South Africa, India and Singapore to do this.

When asked about what are the key benefits that Seedcamp can offer for a startup, Reshma emphasized that Seedcamp positions a startup to grow into a global business really quickly. There are good local initiatives in Europe, but they tend to be insular in a way that does not help the company grow fast enough in the big markets.

I also wanted to know how Reshma would build a consumer web startup if she would not have significant experience and connections and would be like most of the young entrepreneurs out there. Here’s her advice: “Make sure your startup has strong commercial and product persons in addition to a strong technical person. Get the product out right away (the lean startup approach). Get key influencers early on to live and breath your product. Really set miles stones – Short term and long term. Measure, measure, measure! And finally, get it to US.” By this she meant a US presence is a must if you’re building a consumer web company – Something I have said all along.

Lastly Reshma wanted to send a message to all the Nordic and Baltic startups and encourage all of you to apply for the Mini Seedcamp London, which is the last chance for startups to get a seat at Seedcamp Week will take place on 27th July 2010. You can apply here.