Dave McClure, founder of the seed investment fund 500 Startups, celebrated his team's 500th investment at a demo day in San Francisco Thursday. Here's what he had to say.
Dave McClure and his team of investors started the seed fund and accelerator program 500 Startups in 2010. At a demo day in San Francisco on Thursday, entrepreneurs from 500 Startups' sixth accelerator class presented their ideas to a room of potential investors.
At the same time, McClure and his team celebrated a milestone of their own in June: Their 500th start-up investment. He shared his thoughts on the accomplishment--and what he's learned in three years--with GigaOM's Eliza Kern. The full interview is worth a read, but here are some highlights.
First impressions stink.
As an early-stage investor, it can be difficult to weed the successful start-ups from those destined for failure, McClure said. "Your first impressions are not always correct,” he says. “It often takes six to eighteen months to figure it out. I mean, we often figure out what doesn’t work within six months. But genius emerges more slowly.”
He added: "A lot of VCs like to think they know exactly what’s going to work, like, ‘Oh, I remember when they were so awesome and I was so awesome picking them.’ But the more we do it, the more we realize that we’re wrong a lot. That’s why we take more bets, and pretty consistently, we’re better able to identify wins."
“Everyone who’s an entrepreneur is irrationally optimistic that they’ll be in the top 10 percent," he said, adding that those who realize they won’t be in the top 10 percent--but look at the program as positive learning experience and springboard for future projects--are the entrepreneurs who do best.
Silicon Valley is an attitude--not a cure-all.
Some founders move to Silicon Valley expecting it to be a place of otherworldly innovation and creation. "Silicon Valley is a magical place, but it's comprised of people from somewhere else. It’s more about the attitude--it’s not so much where people are from," he added.
FRANCESCA FENZI reports on entrepreneurship, technology and small business news from San Francisco. Her work has previously appeared in TIME, USA Today, Pop City and The Northside Chronicle. @FrancescaFenzi