Accelerator and seed investor 500 Startups has set out to raise a $200 million fourth fund, after recently closing a third one with $85 million. The five-year-old company is an early-stage seed fund and accelerator program founded by PayPal and Google alumni. Co-founder Dave McClure told CrunchBase.com that the firm is not going after the next hot tech. “A lot of folks are chasing different sexy things like drones and virtual reality and the Internet of Things, and those are all great and we’ll do a bit of each of them, but e-commerce, marketplaces and SaaS is our bread and butter, and we don’t see those [sectors] dying down any time soon. Globally, in fact, they’re growing,” he said.
According to McClure, half the capital will be used for initial investments, with the rest for follow on investments. What’s more, this fund will have a slightly longer time horizon. “We’ve invested each of our main funds over the course of two years; we plan to invest this over three years,” he said.
500 Startups is more than a name. The firm has invested in more than 1,000 companies throughout over 50 countries. Its four-month accelerator program provides startups access to mentorship, hands-on learning sessions, and office space. The accelerator investment is $100,000 net of fees for 5% of an equity stake in the company. The accelerator program is run in Mountain View, California, San Francisco, and Mexico City.
McClure has been an investor in over 250 companies including Mint.com, Twilio, Wildfire Interactive, SendGrid, TaskRabbit, SlideShare, Mashery, CreditKarma, KISSmetrics, and MakerBot, among others. This year alone McClure has had some tough conversations around Silicon Valley’s lack of diversity in terms of the scarcity of African Americans in the tech industry and the challenges faced by women and African American founders when it comes to access to venture capital. Not backing down, he acknowledges there is a problem.
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