Video: Dave McClure on Putting Other People’s Money Where His Mouth Is

Dave McClure, the ever-present event organizer, startup advisor and consumer-Internet marketing nut recently stepped out on his own to create 500 Startups, a seed investing and startup-incubation firm. He is partway through raising what’s hoped to be a $30-million fund, and has wasted no time putting that money to work, rolling in about 13 of his previous angel investments and making multiple new fundings per day in the last week.

McClure is nothing if not emphatic, but he toned it down a notch to explain to me what he’s planning to do in an interview at the GigaOM office. (Read: There are no colored fonts and very few swear words in this video.) 500 Startups will be an incubator in the vein of TechStars and Y Combinator, having obtained a large office space on Castro St. in Mountain View, Calif.

McClure said the firm (where other partners have not been named yet) will make a lot of seed investments but will also participate in Series A and B rounds. He’s looking to help 500 Startups portfolio companies differentiate based on three factors: their design, distribution and metrics. The fund will seek startups that are less about technology and more about solving problems, with simple revenue models and a capacity for quick iteration.

McClure was a startup founder himself back in 1994 (Aslan Computing, sold to Servinet/Panurgy in 1998), and since then, he’s worked on marketing for companies like PayPal, Simply Hired and Mint; taught a class on making Facebook applications at Stanford; and invested on behalf of Facebook and the Founders Fund. One thing we discuss a bit further in the video is the delicate entrepreneurial balance between listening to customers and listening to your gut.


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