Welcome Aman Verjee to 500 Startups as COO

As 500 Startups enters its seventh year, I’d like to welcome an old friend and ex-PayPal colleague to the team, Aman Verjee, who is joining us as COO and will also be joining the 500 Startups management team. I’ve known Aman for over a decade and aside from some really bad puns and questionable sartorial decisions, he’s a pretty awesome person.

Aman has over fifteen years of operating experience in both public and private technology companies including PayPal, eBay, Sonos, Collective, and CAN Capital. Over the years he’s helped raise nearly a billion dollars from top VC and PE firms such as Accel, Greycroft, and KKR, and banks such as Morgan Stanley, SunTrust, Wells Fargo, UBS, JPMorgan and Barclays. For the past two years Aman was CFO at CAN Capital, an alternative finance platform that has provided billions of dollars in lending for small business. Before that, he was the CFO of Collective, Inc., an ad tech platform in New York; while there, he guided them from $100 million in revenue to over $175 million in revenue, while generating double digit profit margins. Aman led all of their public company readiness efforts and led Collective through an S-1 filing.

Before that, Aman spent nine years at PayPal and eBay doing financial planning and analysis, customer analytics and strategy, and helped build PayPal into a leader in payment processing and financial services. Earlier in his career he also held positions at Lehman and McKinsey. Aman graduated from Stanford with an undergraduate degree in economics, and a JD in law from Harvard. Aman was born in Nairobi, Kenya; grew up in Toronto, Canada, and is married with two wonderful little girls.

The role of COO will be an important one at 500 as we prepare the company for future growth and scale, continue to raise capital for our global funds and regional & vertical microfunds, and also monitor our top-performing companies as they grow. We look forward to Aman helping take 500 to the next stage of growth… to Infinity and Beyond!

dave_aman

The Artist Formerly Known As Accelerator

When Christine and I started 500 Startups six years ago, we knew we wanted to run an investment program for startups that emphasized community and education. We had long been inspired by other earlier programs such as YCombinator, TechStars, and SeedCamp. However, we had a new approach and perspective, and wanted to create our own VC firm + accelerator with a decidedly different vibe and experience.  

All these programs, including the 500 accelerator, share several key concepts:

  1. Provide a modest amount of investment capital to a group of startups
  2. Startups work in shared physical space (note: YC de-emphasizes this)
  3. Connect them with a community of experienced founders and mentors
  4. Help companies “accelerate” their progress in a short amount of time
  5. We accept many companies fail, but a few will thrive and grow BIG

On the other hand, 3 key elements make 500 programs different:

  1. A global approach to investing in startups all over the world
  2. A large, diverse team of 150 people, and community of 3,000 founders & mentors
  3. Emphasis on “full-stack” growth marketing and distribution support

Today, we are currently running our 19th batch in Mountain View, and along with our growth marketing and Mexico City programs, we have now graduated over 600 startups in the past six years — and we have invested in another 1,000 other startups as well.

A lot has changed from when we started, and just like our startups, we have experimented and iterated on our model to provide the best possible impact for founders. We have expanded and improved our curriculum, increased our check sizes and batch sizes, and grown our team, skills, and support. We now have a far more robust program, and the bar for companies joining our programs are higher and tougher than ever. Some have millions in revenue and have raised millions from other investors before they even set foot in the door. Rather than just building or improving an MVP, now our companies are focused on customers, revenue, growth, ramping up sales and marketing, expanding their team, and raising a larger round of institutional capital from top Silicon Valley VC firms.

Noting how different things are from when we started, we have decided to change the name and branding for our programs to emphasize these differences and make it clear to founders what our programs are all about. Our Accelerator program will now be referred to as the “500 Seed Program” and our Distro Dojo programs will now be the “500 Series A Program”. The name of the programs more clearly represent their fundraising goals and metrics. Below, we’ve highlighted what we’re doing now compared to before, and what startup founders should expect when they join our programs.

500 Seed Program

Before: when we started our accelerator program, we accepted companies that barely had an MVP (and a few weren’t even that far along), and most had limited usage and revenue traction. We only invested $50K for 5% equity.

Now: 500 Seed Program is geared towards companies with early traction. Most all of them have a functional product, and most have substantial user adoption & revenue. Many have already raised capital, and a few have >$1M in revenue and >$1M raised.

The 500 Seed Program gives startups access to our Silicon Valley network as well as sales, marketing, and distribution expertise. Additionally, founders receive ongoing funding strategy and support. This program invests $150k USD for 6% and $37.5k in program fees.

Company highlights: Shippo, Neighbor.ly, Talkdesk, RealtyShares, Compstak, Mayvenn, Tout, Innovacer, Headout, Haven.ly, OhmConnect, Le Tote, Cleanify, Italist, Finova Financial

500 Series A Program:

Before: In our first year of investing at the post-seed stage often we found ourselves joining seed round extensions, but are now finding more and more opportunities to invest in exceptional companies closer to the subsequent A round than the previous seed round.

Now: 500 Series A program is targeted towards startups that are on the verge of raising their Series A round. This program will include intensive growth and marketing help from our team of top Silicon Valley growth experts. Designed to help companies close to their Series A and build scalable, repeatable marketing operations that can ingest millions of dollars and produce many more millions in revenue. Aka, get the best Series A deal and terms possible. This program provides a check size ranging from $150-250k USD with $50k in program fees. Note that terms depend on company’s prior financing.

Company highlights: Mayvenn, Dollar Beard Club, Saucey, Storemaven, “Rock, Pamper, Scissors”, and Cleanify

And with that, we bid adieu to our former program names and are moving full force ahead with our 500 Seed Program and 500 Series A Program and will continue to provide top tier programs for entrepreneurs around the world.

500 Startups Announces $500M WinterFund™ to Invest in Broken Unicorns

EDITOR’S WARNING: this was an April Fool’s joke… if you actually believed this was a real story, we have a bridge in Brooklyn for sale we’d love to show you…

Today, 500 Startups announces WinterFund, a new investment vehicle focused on the fastest-growing sector of the tech industry — namely, billion-dollar startups recently marked down by Fidelity and other wannabe-kingmaker mutual funds.

The $500M WinterFund plans to make over 100 investments in down-sized Unicorns who have failed to raise at previous nosebleed valuations, yet still have a fleeting chance at sitting atop the Iron Throne of Tech.

500 startups is also announcing a strategic partnership with the city of Fresno, California. We plan to relocate “chilly” WinterFund portfolio companies to sunny and warm Fresno, where they will enjoy stunningly low rents and easy access to recreational substances to get through tough times. Gone are the days of expensive offices in SOMA, here to stay are the days of locating your startup adjacent to the local chicken rotisserie and laundromat.  

“We are thrilled to be the first to “warm up” disheartened founders on freezing cold San Francisco summer nights, and believe we can close deals at great prices in this climate,” said Dave McClure, 500 Startups Founding Partner & VC-In-The-North.

“YC is excited to see second-tier investors like 500 Startups stepping up to make payroll for a few of our less-capable teams who burned through their seed round too fast,” said YC President & Dictator-for-Life Sam “Joffrey” Altman, adding “YC companies always repay their convertible debts… well, unless they get acqui-hired.”

“Wall Street’s brutal markdowns are our gains. However let’s not call them “down” rounds, rather we prefer “reduced cap” or “decapitated” financings… because Winter isn’t coming; it’s already here,” said Christine Tsai, 500 Founding Partner and Chief Wildling Tamer.

About 500 Startups

500 Startups is a global venture capital fund and startup accelerator based in Silicon Valley with $250M in assets under management. We have invested in a wide variety of technology startups all over the world, currently over 1,500 companies since our inception in 2010 including: Credit Karma, GrabTaxi, Twilio, Udemy, Ipsy, TalkDesk, Intercom, MakerBot (acq’d by SSYS), Wildfire (acq’d by GOOG), and Viki (acq’d by Rakuten). Our team of 100+ people manage seed investments in 20 countries and speak over 25 languages and most of them never fall for an April Fools’ gag.

WinterFund

Startups are hard, so is TV

Last week Syfy piloted the first episode of our new docu-series called the Bazillion Dollar Club.  The initial episode followed Vango on their journey from the beginning of our accelerator program (500 Startups Batch 12) to Demo Day, where they raised over $1.5M. It was received positively by those who watched; Vango saw 12,000 new visitors to their website and 5,000 new downloads of their app the day after the pilot aired. Missed it? Check it out — the first episode is available free on iTunes, Google Play, Amazon, Hulu and Syfy.com.

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Starting early this year, we filmed the series with hardware accelerator Highway1 and Zero Point Zero Productions, the uber-talented folks behind Anthony Bourdain’s food and travel empire. The show followed six startups, three from 500 Startups, Vango, Ivee, Roost and three kickass hardware startups from Highway1, FishBit, Spinn Coffee and Sereneti Kitchen. Our goal was to show what it’s really like to to start a company in Silicon Valley — how to build product, get customers, grow the team, pitch the business, and raise capital. We didn’t change how we work for the camera, and both the ups and downs of running a startup were on display. Sometimes products didn’t work as planned, sometimes there were arguments, sometimes people got very humbling feedback about both the business and themselves. Sometimes people raised a million dollars.  Sometimes people got frustrated and quit. We showed both ecstatic and dejected founders.  Ultimately, we hope we showed people a little bit of what it takes to start a company.

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There are five more episodes yet to air, each following a new startup facing unique challenges as they try to build a successful company. While Syfy did not pick up the rest of the series, we are optimistic the remaining episodes will find the right audience on another network in the near future. And if it doesn’t happen,  well, hey… at least we had a brief shining moment on the telly and we didn’t stink up the place.

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To everyone who was involved with shooting the show or supporting our efforts, we want to say ​THANK YOU. And, remember to believe in your fucking self… even if no one else does 😉

Recent Coverage: TechcrunchRecode, Venturebeat

IMDb: Bazillion Dollar Club, Dave McClure, Brady Forrest

500 STARTUPS ANNOUNCES NEW $5 BILLION “FIVE UNICORNS” FUND

Today, 500 Startups announced the filing of its latest fund, a $5 billion “Five Unicorns” mega-fund. The new fund plans to make five investments in just five startups, at one billion dollars each, over a period of five years.

The five “Unicorn” startups must already have raised at least $1 billion from the biggest & best VC funds, such as Sequoia Capital, Benchmark, Greylock, Andreessen-Horowitz (A16Z), or Union Square Ventures. (Note: former top-tier funds are encouraged to re-apply for qualification in Five Unicorns Fund II, after they have achieved more traction.)

“After five long years of busting our asses investing in 1,000 companies all over the world, we realized we were working way too fucking hard for VCs,” said 500 Startups Founding Partner Dave McClure. “We decided to stop our foolish ‘spray & pray’ strategy, and take the advice of Peter Thiel to the next level. Our new fund will invest exclusively in the top company each year already clearly branded as a unicorn, and already funded by unicorn VCs. This strategy will also give us a lot more time to go skiing with other entitled white male VCs.”

Even though none of these unicorns are close to a liquidity event, their investors will be celebrated as victors.

“It’s about time 500 Startups basked in some of that glory,” said 500 Startups Managing Partner Christine Tsai, who looks forward to providing questionable PR quotes about unicorns and participating in all-important SXSW panels covering the topic. She may even go on to become a “thought leader” on the subject.

As is tradition in the venture industry, 500 Startups plans to brand these new unicorn logos proudly across its website and Dave’s lower back. The company has also asked press to ensure they namedrop at least one of their new unicorns whenever mentioning 500 Startups.

More information is expected to be released to LPs and wealthy Bitcoin hoarders on April 1st of next year. Following this, a launch celebration will take place at a ski retreat so exclusive even Dave can’t get an invite.

About 500 Startups

500 Startups is a Silicon Valley venture capital seed fund & startup accelerator. We run an accelerator program emphasizing design & user experience, distribution & customer acquisition, and lean startup practices & metrics. Our investment team is comprised of 16 people who speak ~20 languages and operate in 12 different countries and most of them never fall for an April Fools’ gag.

500 Startups Achieves Target Quota of Less Than 25% White Males From Stanford

500 Startups announced today the promotion of two new managing partners*, Bedy Yang and Khailee Ng. The company is now even more AWESOME than ever before and currently has over 35 team members across 10 countries who speak 20+ languages. 500 also has $115M in assets under management and has invested in 850+ companies in the past 4 years. And we ate like, 17 green M&Ms last week too.

Over the past three years, Bedy Yang has made over 25 investments in Brazil and 50 investments around the world. She’s truly multicultural (she’s lived in Brazil, China, Germany, Paraguay and the US) and founded Brazil Innovators to bring together Brazil and Silicon Valley. She’s also been intrumental in launching our 500Women Syndicate to support female entrepreneurs, and recently completeted The Kauffman Fellows Program. In short, she’s a badass.

Khailee Ng (who tragically lost a vowel at the tender age of three) manages the 500 Durians fund in Southeast Asia, has been a successful entrepreneur with 2 exits (SAYS.com acquired by Catcha Group, Groupsmore acquired by Groupon), and has made over 30 investments across Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam. Not to brag, but he started buildling web products at 15 and his first companies at 24. Khailee will focus on 500’s onglobal expansion and building more connections between emerging markets and Silicon Valley.

In addition to promoting talented people on our team, we also recognize the importance of a diverse and global team and portfolio. 500 has invested in over 200 companies that come from outside the US, from across 40+ different countries. The 500 team itself now is over 40% female, about one third of our team was born outside the US, and we speak over 20 languages including: English, Spanish, French, German, Italian, Swedish, Portuguese, Japanese, Korean, Mandarin, Cantonese, Malay, Indonesian, Arabic, Hindi, Punjabi, Gujarati, Tamil, Bulgarian, Russian, Farsi, Hebrew, and Hillbilly. We’re actively seeking to expand the team to include folks fluent in pig latin & Klingon (neeeeerdz!).

Learn more about our crazy team and global network of founders, investors, and mentors at 500.co.

*“The title “Partner” is used in accordance with customary business practice in the VC industry and does not indicate legal status in a partnership.” Our grumpy lawyer who wears dad jeans made us say this.

Why We Announced Public Fundraising

If a tree falls in a forest and no one is around to hear it, does it make a sound?

For over a year, I’ve been asking myself a similar question regarding fundraising for 500 Startups. Prior to the JOBS Act, it wasn’t legal for venture capital and hedge funds to talk publicly about their fundraising activities. Imagine not being able to talk about the *exact* thing you need to talk about. Imagine trying to sell something but not being able to advertise it. Anyone else see a problem here?

Of course, traditional funds have raised capital for years playing by these rules, and up until today 500 has also operated in the same way. However, it’s a more complicated and delicate sales process when you have to establish a “pre-existing relationship” before you can say anything about your fundraising… even if you think you’re talking to “accredited” investors. Now, the new general solicitation rules introduced by the SEC under the JOBS Act have changed the game, and, as of yesterday, 500 Startups is one of the first funds to take advantage of these new rules.

Therefore, I can now tell you we are currently raising our third flagship fund. I can tell you that the fund has a $100 million target. And, I can tell you that, if you’re a U.S. accredited investor and meet our investor requirements, you can invest in our fund. Seems simple, right? But for the last 80 years, I wasn’t able to do that (legally at least).

Before today, our lawyers (and likely the SEC) would have had my head for those comments, but I can now say them without fear given our new SEC filings and verification processes. No longer do we have to say “no comment” when a reporter or member of the public asks if we are fundraising. While that might not sound as sexy as releasing a new 3D-printing product or a video-enabled e-commerce startup, I’m excited by the opportunity.

The work we have to do on our fund is just beginning, but let’s give some credit to government officials for [hopefully] getting this one right. We should also give thanks to folks like Naval Ravikant, Kate Mitchell, the NVCA, and other good folks who worked hard for years to get the JOBS Act passed by Congress.

Lastly, if you’d like some info on our funds — feel free to apply at 500.co/invest.

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