In our recurring journey to analyze the ever-evolving world of Startup Accelerators, today we spent some time with another undiscussed trend-setter among seed accelerators: 500 Startups (in case you missed it, here’s our chat with Stanford StartX).
I stumbled upon 500 not too long after its setup (2010) by co-founders Dave McClure, already a very visible figure in the Silicon Valley stage, for being a member of the iper successful “PayPal mafia”, and Christine Tsai, for sometime one of my co-workers in the early days @Google (YouTube).
Over the past decade, 500 has become one of the most prolific seed investors in the world (~2500 investments), also known for its strong international footprint. 500’s DNA has always been one of a startup (“Think you’re crazy? We are too”), move fast, break things. With Dave gone and Christine at the helm, in its current re-incarnation, 500.co employs ~150 people, manages more than $600M in committed capital (according to Christine’s LinkedIn profile), and, as some its notorious T-shirts recite, growing #500Strong.
The world around them has evolved, so have they: the batch-driven accelerator has changed its formula, they have multiple regional funds under management, and corporate-innovation services seem to become more attractive by the day.
Their standard terms in the accelerator program are still $150K investment for 6% of equity, but with “some flexibility”, in order not to miss the opportunity for follow-on investment rights in the winners. Interesting times.
However, as our guest Aaron Blumenthal (Director of Global Portfolio Services) keeps reminding in our chat: when in doubt, their North-Star has not shifted: #Founders-First.
Will Demo Days still represent the same “right of passage”? How to pay for such a large workforce? Is CVC-as-a-service a temptation for 500 these days?
Of this and more, we discuss in our #MindtheChat. Enjoy!
– Marco Marinucci
1.59 Founded 4 startups – learned lessons, empathy first
3.25 Defining Startup Accelerator: it has to include equity
7.32 From YC to 500.co: founding principles
9.30 What is 500 today: investment and education
12.34 500.co numbers: 150 people, 26 batches in SF only, 2500 investments, 6k founders
15.29 Funds in different regions (< Middle East, Mexico, Thailand?>)
16.20 Why we are in recruiting business
20.30 Terms of accelerator and why we do not deviate
22.22 Is Value Prop of accelerator same as when it started?
24.57 Moving from “batches” to rolling starting dates
28.03 Will Demo days still be there?
30.00 Cost of management: from program fees to Ecosystem Team
33.30 YC and Plug&Play the closest “competitors”
37.17 Can corporate innovate by themselves and value of “insane” entrepreneurs
41.04 How important are your internal tracking tools?
45.52 What’s your future temptation: M&A or CVC as a service