“VCs suck about as bad as startups” – Dave McClure, 500 Startups at Echelon 2013
Founding Partner of 500 Startups Dave McClure delivered a session on ‘Shifts in investment trends in Silicon Valley and the Series A crunch’ at Echelon 2013 in Singapore. In his distinctive flamboyant style, Dave spoke about investment trends in Silicon Valley and other markets, changes among tech startups off-late and the Series A crunch (or the lack thereof!)Below are a few snippets from his presentation:
- We are very bullish on the emerging markets, that’s where the growth is.
- Changes in tech startups: Less capital required to build companies; lots more people online, particularly on online platforms; Increase in number of incubators
- VCs can be “lean” too: We apply Lean Startup concept in our investment thinking: Invest in lot of startups, making incremental investments
- 500 Startups Strategy: Lots of little bets
- As an investment class we (VCs) suck! VCs suck just about as startups do!
- Investment stages for a startup:
- Product Validation + Customer Usage
- Market Validation + Revenue Testing
- Revenue Validation + Growth
- For startups in countries where the government gives grants/support: Don’t prioritize government money over money from your customers
- Series A Crunch is bulls**t! You should not worry about Series A crunch too much. There is more capital inventory being created than availability of fundable startups. Not every startup needs Series A and not many startups survive till Series A.
Below is Dave's presentation at the conference.