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@DaveMcClure
@500Startups http://500.co
Khazanah Tech Talk - San Francisco, March 2017
What’s New in Tech?
Dave McClure

Founding Partner, 500 Startups
00’s & 10’s:
• VC: Founders Fund, Facebook fbFund, 500 Startups
• Angel: Mash...
• What is 500?
– $330M AUM / 4+ main funds / 10+ microfunds
– 150 people / 25 languages / 20 countries
– 1800+ Companies /...
2017: What’s New in Tech?
• Startups: Cheaper, Faster, Bigger, Better
• VCs: Lots of Little Funds, Lots of Little Bets
• C...
Dinosaurs vs. Cockroaches

LEAN Startup: Simpler, Faster, Cheaper, Smarter
1990-2000
”Big, Fat, Dinosaur Startup”
• Sun Se...
Startup Platforms:

Search, Social, Mobile,
Pics, Video, Voice, Msgs
Startup Risk Reduction
Concept
Early
Customer
Usage
Scalable
Customer
Acquisition
[about to be]
Profitable
Unit
Economics
...
2017: What’s New in Tech?
• Startups: Cheaper, Faster, Bigger, Better
• VCs: Lots of Little Funds, Lots of Little Bets
• C...
Football
“West Coast
Offense”
Baseball
“MoneyBall”
Basketball
“3-pt revolution” Venture Capital
500 Startups
“Lots of litt...
Q: How Many Series A Startups
Turn Into Unicorns? (~1%)
Data from ~600 companies from 500 Startups Funds I + II (2010 - 2013 cohorts)
$1-10M
Q: How Many Startups to Get 1 Unicorn...
The Lean Investor
Make lots of little bets:
• Start with many small “experiments”
• Filter out failures + small wins
• Dou...
Investment Stage #1: 

Product Validation + Customer Usage
• Structure
– 1-3 founders
– $0-$100K investment
– Incubator en...
Investment Stage #2: 

Market Validation + Revenue Testing
• Structure
– 2-10 person team
– $100K-$1M investment
– Syndica...
Investment Stage #3: 

Revenue Validation + Growth
• Structure
– 5-25 person team
– $1M-$10M investment
– Seed & Venture I...
2017: What’s New in Tech?
• Startups: Cheaper, Faster, Bigger, Better
• VCs: Lots of Little Funds, Lots of Little Bets
• C...
The Unicorn “Hedge”
https://500hats.com/welcome-to-the-unicorn-hedge-2fd3c6b50f89
TREND: Public companies outsourcing rese...
Startups + Corporates
18
Startups:
• Speed
• Talent (People)
• Product / IP
Corporations:
• Customers
• Budget / Money
Corporate/Startup
Innovation Framework
Partnerships
Investments
M&A
Outcomes
Strategies
People
Product
Customers
Dealflow
...
2017: What’s New in Tech?
• Startups: Cheaper, Faster, Bigger, Better
• VCs: Lots of Little Funds, Lots of Little Bets
• C...
Critical Ecosystem Factors
• Optimism & Belief (“Silicon Valley”)
• Mentorship + Education (Knowledge)
• Universities + Co...
Building Startup Ecosystems
Q: How many VC funds needed
to build a startup ecosystem?
• USA: ~800 VC funds; 2.5 per 1M ppl
• China: ~700 VC funds; 0.5...
A Brief History of
US Venture Capital
• first VC funds: ARDC, JH Whitney (1946)
• SBICs / Small Business Investment Act (U...
2017: What’s New in Tech?
• Startups: Cheaper, Faster, Bigger, Better
• VCs: Lots of Little Funds, Lots of Little Bets
• C...
500 Investment Themes
Sectors
CONTENT/CREATION
DATA SCIENCE/AI
CLOUD/SAAS/B2B
E-COMMERCE
EDUCATION
ERP/PRODUCTIVITY
FINTEC...
Fintech still going strong; 19 Fintech
Unicorns valued at $58.7B globally
Source: CBInsights-
Over 220 unique investors in fintech in 2010. Now, there are
over 900. Over 70 strategics and corporates invested in
block...
2017: What’s New in Tech?
• Startups: Cheaper, Faster, Bigger, Better
• VCs: Lots of Little Funds, Lots of Little Bets
• C...
500 Startups is one the most active early-stage
frontier technology Investors
IoT - SecurityIoT - ToysIoT - Health IoT - H...
>$2.2B invested in 156 VR deals in 2016
Source: Digi-capital: http://www.digi-capital.com/news/2016/07/record-2-billion-ar...
Apple, Google, Facebook
acquiring VR/AR startups
Source: CBInsights https://www.cbinsights.com/blog/top-acquirers-ar-vr-ma...
2017 VR Investment Focus
Source: Goldman Sachs Global Investment Research
Development building blocks & tools
• VR input
•...
Apple, Google, Intel, Microsoft, Salesforce,
Amazon acquired 18 AI companies in 2016
Source: CBInsights
2017 Investment Focus & Predictions
Artificial Intelligence for Verticals
Source: CBInsights
With the rise of big data & A...
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• What is 500? – Startup & VC Tech Trends

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• What is 500?
– $330M AUM / 4+ main funds / 10+ microfunds
– 150 people / 25 languages / 20 countries
– 1800+ Companies / 3000+ Founders / 200+ Mentors
– Investment, Accelerator, BizDev, Marketing, Events, Education
– Community + Content + Conferences
• 1800+ Co’s / 60+ Countries
– Twilio (NYSE: TWLO)
– Credit Karma
– Grab
– Wildfire (acq GOOG, $350M)
– MakerBot (acq SSYS, $400M)
– Viki (acq Rakuten, $200M)
– Behance (acq Adobe, $150M)
– Simple (acq BBVA, $117M)
– Sunrise (acq MSFT, $100M)
– SendGrid
– TalkDesk
– Intercom
– Udemy
– Ipsy
500 Startups

Global Seed Fund & Startup Platform

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• What is 500? – $330M AUM / 4+ main funds / 10+ microfunds – 150 people / 25 languages / 20 countries – 1800+ Companies / 3000+ Founders / 200+ Mentors – Investment, Accelerator, BizDev, Marketing, Events, Education – Community + Content + Conferences • 1800+ Co’s / 60+ Countries – Twilio (NYSE: TWLO) – Credit Karma – Grab – Wildfire (acq GOOG, $350M) – MakerBot (acq SSYS, $400M) – Viki (acq Rakuten, $200M) – Behance (acq Adobe, $150M) – Simple (acq BBVA, $117M) – Sunrise (acq MSFT, $100M) – SendGrid – TalkDesk – Intercom – Udemy – Ipsy 500 Startups
 Global Seed Fund & Startup Platform

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