“Look at him,” whispers the guy next to me. “He’s wearing a funny hat. He doesn’t care what people think of him.”

True, Dave McClure did begin the night in beanie. He’s also a venture capital superstar and founder of 500 Startups, a firm that has invested in over 1,500 technology firms — and they’re looking for more. Our San Francisco IVY members gathered for an IVY Entrepreneur Night with McClure at Parasoma, a San Francisco space for rising entrepreneurs, where he shared his experiences and wisdom with the crowd.

500 Startups Founder Dave McClure Discusses Entrepreneurship with Beri Meric, IVY CEO

In essence, this:

Familiarize yourself with the past.

McClure’s success is founded on investing in fledgling companies, and he likes what he does — as should you. But for goodness sake, remember the bad times. Even if you’re too young to have a personal connection to the economic collapse of 2008, let alone the busted dot.com bubble at the turn of the century: “Live with your eyes open,” says McClure. “Those were desperate times.” Serious downturns happened and will happen again.

Replace the “b” with an “m.”

Billion-dollar businesses are unrealistic. Instead, aim to build a company that will turn ten million in annual sales and employ a hundred people. It’s actually a somewhat achievable goal — though tread carefully, as problems will eventually occur. What they will be or when they’ll happen is a mystery, but anticipate agony. “The ride down is hard,” warns McClure. No one is immune.

Be sure you want to run an empire.

Outside of producing a necessary item or service, you must be prepped with an extraordinary amount of passion for execution and the ability to assemble a family or community of partners. You may be all kinds of awesome, but a powerful group is critical. Specifically, McClure stressed assigning people to engineering and marketing roles.

Execution, execution, execution.

Business backers will not necessarily that you have a unique product — in fact, your product should be something with which others are already turning a profit. The key difference to your product? You will do it better and with a brighter team.  “It’s about trending, positive growth possibilities,” says McClure. “We’re not trying to invest in next greatest thing. We want to see something you’ve built that others have already validated.”

Think problem solving.

Is there something that’s bothering you that you can fix? That’s a smart start. Consider it a sign. After that, figure out how it’s going to make money.

Don’t believe everything you hear.

“There is so much mythology told as fact,” says McClure. Be rigorous about analyzing data: all premises must be supported.

And always keep the following truisms in mind:

  • Venture capitalism is a science, and patterns count. Your company needs a history, not only an idea.
  • There is a “mind-blowing amount of hubris and BS” in this business. People like McClure aren’t idiots, and they can detect both quickly. Don’t try to blow air up their skirts.
  • If you can’t commit five to ten years to your business, do something else.


With so much potential for pain, you may as well adopt a sense of silliness and irreverence!

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