India and U.S.-based mygola is announcing today that it has received $1 million in seed funding from Dave McClure of 500 Startups, Blumberg Capital, and several other angel investors.
With social travel startups popping up every other day, and a bevy of travel resources already firmly planted in a crowded space, what is it about mygola that’s getting McClure and others excited? For starters, the service’s value proposition starts with the fact that it’s built for users who already have specific trip-planning questions in mind. Essentially, it’s a pay-as-you go travel concierge, so you bring your proposed trip to mygola, with specific targeted questions in mind, and the service handles all the logistics (research and bookings) for you. → Read More
After 500 Startups Demo Day on Thursday, I sat down to talk to investor Dave McClure about the strategy and vision behind the early stage seed fund and accelerator program, which he hopes will eventually encompass 500 actual startups (currently the portfolio is at around 110).
In the interview McClure talks about the perfect formula for a startup (hacker + hustler + designer) and why the three Ds — Design, Data and Distribution — are important for young companies. He says that the fund basically makes its $25K to $250K bets on companies with simple revenue models, “Things that are easily understood and make money.”
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500 Startups first Demo Day sprint is over and people are trickling out their rankings lists of the 23 startups, or “little monsters” as co-founder Dave McClure calls them. McClure, with a background in marketing, has a unique curator’s eye, and his first batch of companies are an interesting brood, to say the least.
Companies that are part of the 500 Startups accelerator program get a 50K investment from the fund at a $1 million valuation and can stay in the 500 Startups offices for 3-6 months. Companies that are part of McClure’s seed program receive up to $250K in seed funding, and McClure has the option of following on in later rounds. All in all the 500 Startups investment stable includes 110 startups, including Twilio, inDinero and Foodspotting. → Read More
Prashant Gulati says that TechCrunch should be banned in the Middle East. That’s not because he isn’t a big fan of the site, but because he says it “puts some naïve and green young ones at a disadvantage”. The Dubai-based technologist and angel investor funded a startup recently. Soon after he made the investment, he learned that the majority of the money had been withdrawn from the bank. The young company founder—who previously had been unable to make ends meet—was seen driving around in a fancy red Corvette. When confronted, the founder retorted that he hadn’t started his business to live the life of a hermit; he needed to keep his girlfriend happy and enjoy life. Since he had achieved success by raising capital and was now famous, he was entitled to live the high life like all the people that he reads about—on TechCrunch.
Prashant had no choice but to bear the loss and to coach the founder.
I know that many Silicon Valley investors will be able to relate to Prashant’s frustration. With the attention that new investments receive and the fanfare for business-plan contests, it is easy to believe that once you’ve raised capital, you’ve made it. So fledgling entrepreneurs often spend the majority of their time developing sexy PowerPoint presentations and pitching to investors rather than building their business. → Read More
Zachary Allia is just 26 years old. He’s either really lucky, is a negotiating savant or a combination of both. Back in 2007 when Facebook first opened their platform, Allia and a graphic designer pal came up with the Free Gifts app– mostly because he was a poor college kid and paying $1 to send someone a picture of a cake seemed exorbitant. He launched it and woke up the next morning to find it had 1 million users. It soared to ten million before he sold it to SGN in 2008.
Three things are notable about that deal: It was for a small undisclosed amount but Allia owned 100% of the company at the time, so it was likely a life changing amount of money; he chose selling to SGN over selling to Zynga (doh!); and he came to regret the deal once SGN abandoned the product to move more towards games. When Facebook abdicated its own virtual gifts product last summer, Allia decided he wanted the company back. Getting it took some doing, as he explains in the exclusive interview with TechCrunchTV below. → Read More
Dave McClure‘s 500 Startups fund has just made its fourth investment in Asia. Tokyo-based Exchange Corporation, which runs a peer-to-peer lending service called AQUSH in Japan, has raised an undisclosed sum from the Silicon Valley-based fund.
Much like Zopa in the UK, AQUSH connects people with extra money with those who want to borrow money. The site allows lenders to set their desired investment amount and interest rates from 4% to 15% for 5 classes of borrower credit risk, as denoted by AQUSH itself. Loan applicants are screened by AQUSH based on their credit histories, financial situation and FICO scores. → Read More
One of the most interesting discussions at TechCrunch’s Disrupt conference was the debate between the “super angels” and VCs. No, I’m not referring to “AngelGate” or the question of which investor group squeezes entrepreneurs the most. Despite what they say, all investors are in the game for personal financial gain; it’s not about nurturing entrepreneurs or doing good for the world. The most interesting discussion—for entrepreneurs—was about whether a startup should raise lots of venture capital and go for the billion-dollar exit, or raise less money and be happy with a few million.
This issue is much more important than it seems: it affects the way you grow your company, and the focus you place on products and customers. When you go for the billion-dollar exit, you have to start with a master plan for owning a significant slice of a multi-billion-dollar market. You need to develop grand products for grand markets. This is good—you need a vision and a long-term focus. The problems begin when you start raising capital and racing to grow at all costs. And that is where the real chasm between the “super angels” and VCs is developing. → Read More
This guest post is by Dave McClure, founder of 500 Startups and GeeksOnaPlane.
As we wrap up our GeeksOnaPlane video series for TechCrunch TV, I thought I’d offer a perspective on Asia from the eyes of a Silicon Valley geek and investor (not to mention the father of two Japanese-American kids).
I am extremely optimistic about tech entrepreneurship around the world, and in particular in the emerging powerhouse economies of Asia. My new fund 500 Startups is only a few months old, and yet we have already made 8 investments outside the US (4 in Europe, 4 in Asia). Earlier this year, on a trip to Japan I made an investment in MyGengo.com, which provides a crowdsourcing platform and API for language translation. Over the spring & summer, we made several other investments in Europe after meeting companies last year in London at SeedCamp. And our most recent deal happened just this past Thursday, and is our first portfolio company in China — ChinaNetCloud out of Shanghai. → Read More
On the surface, it seemed like the situation that has come to be known as AngelGate was dying down. Since we broke the news about the secret meetings between angel investors where they supposedly agree to agree on things, a lot has been said on both sides. Mike said what he knew, and one of the angel investors present at the meeting he crashed, Dave McClure, came out in opposition to the allegations. But things have gotten more interesting this evening.
McClure sent out a tweet earlier that was clearly meant to be a direct message. It read, “Ron is throwing us under a bus. and it’s chickenshit that he writes that after David Lee comes to both meetings.” He quickly deleted the tweet, but not before plenty of people saw it, responded to it, retweeted it, and it was syndicated elsewhere. → Read More
Earlier this month, we gave you a first look at Geeks On A Plane’s recent tour through Asia. Led by super angel investor Dave McClure, roughly 55 entrepreneurs and investors traveled to Asia’s top markets, including Shanghai, Seoul, Beijing and Singapore, to get a better understanding of the booming region, connect with their local counterparts and sample the rich culture and history on display.
Along the way, the group documented their travels in short videos with the help of Ben Henretig, founder of Micro-Documentaries, who shot and produced each piece. Geeks On A Plane has graciously agreed to give TechCrunch readers first access to these mini-documentaries, a small window into Asia. In this week’s installment, we go to Beijing and Seoul. Videos ahead. → Read More
We’ve come to the last installment of the Super Angel v. VC SMACKDOWN and we’ve saved the wonkiest, nerdiest topic for last: Should entrepreneurs swap investor cash for convertible debt or equity?
Somehow, this is the topic that generates the most passion. If you don’t understand the basics, August Capital’s David Hornik– a former lawyer– breaks them down: “It’s about price and control.” Angels are saying that convertible debt deals are more entrepreneur friendly, but Hornik says there’s an easier way to make sure you don’t get screwed: “Don’t take money from people you don’t trust and like.” And then, Super Angel Dave McClure invokes Allah….yeah it doesn’t make a lot of sense in the video either.
The best moment of the entire series had to be in the 8 minute range when Hornik tells McClure to “shut up so he can agree with him.” Feel the love, people. → Read More
Ding, ding! It’s round four of our Super Angel v. VC SMACKDOWN. Both of our pugilist Davids live and work in Silicon Valley. Given that today’s topic is about whether or not the heft of East Coast Super Angels like Josh Kopelman, Chris Dixon and Fred Wilson is pulling the center of early stage funding gravity away from famed Sand Hill Road, you’d think it’d be nothing but agreement. “Oh, no, Silicon Valley is still the center of the universe.”
But you’d be wrong. → Read More
The market for web-based translations is estimated to be worth around $3 billion currently, and big markets tend to attract investors. One of the newer companies in that area, Tokyo-based myGengo (which we previously profiled as “Mechanical Turk for translation”), just raised a $750,000 seed round from some high-profile backers. → Read More
In part three of our Super Angel v. VC SMACKDOWN Dave McClure says “I am all about the flip. GREED IS GOOD. I am Gordon Gekko in Silicon Valley.” But is he? Wouldn’t greed be going after the big win not the tiny flip?
In this clip we come to one of the core distinctions between Super Angels and VCs: Are sub-$50 million exits the desired goal in Silicon Valley or are small acquisitions what you settle for when your company doesn’t hit it big?
McClure argues that small flips are more sustainable for the Valley, despite the fact that small flips don’t create the next Googles and Facebooks to acquire future generations of Super Angels’ companies. McClure says he’s counting on non-technology companies to start buying hundreds of technology companies, but do entrepreneurs want to sell to someone even stodgier than a Microsoft or a Yahoo?
David Hornik counters that Sand Hill Road is about changing the world and that’s the business he wants to be in. (For the record, that’s the business I moved to Silicon Valley ten years ago to cover.) → Read More
So let me get this straight, you call yourself an angel, but you’re investing limited partners’ money…doesn’t that just make you a small, early-stage VC? And if you’re successful, don’t you just raise a bigger fund and hire more partners, looking a lot more like an early stage VC?
In day two of our David v. David/ Super Angel v. VC SMACKDOWN, even Dave McClure admits “Super Angel” is a flawed term. But he insists there’s still a difference between what he does and what David Hornik does as a partner for August Capital. And, he insists it’s a better way to make money and the future of investing in the consumer Internet.
We also tackle the thorny topic of “value add.” Can an investor who doesn’t have operating experience really add value to a startup, and is “worked at Google” or “worked at PayPal” equal operating experience to starting, running and exiting a successful company? In old days, angels were known for deeply mentoring their portfolio companies, but how do you mentor when you’re investing in 500 startups? → Read More
Watching the battle of words, blog posts, term sheets and Tweets unfold over the last few weeks between VCs and Super Angels has been a little surreal. I’ve spent a career convincing editors that the internal workings of Venture Capital are more interesting than they sound, but even I can’t muster the passion to declare convertible debt AWESOME while equity TOTALLY SUCKS.
Clearly, this cultural explosion of tension is about more than just terms and who does what deal. After all, in theory, both these group need each other to thrive.
Rather than commission yet another guest post on the subject, we figured let’s just invite Super Angel rabble-rouser David McClure and early stage VC defender David Hornik into the studio for a no-holds-barred Smackdown. This is a five-part series tackling five wedge issues of the debate, and we’ll post one every day this week– consider it a primer on what you missed if you took August off, Mr. Old School VC.
Today’s topic: Why the hate? Don’t you two need each other?
As always when Dave McClure is involved, the language is NSFW. There, you’ve been warned. → Read More
Stealth Mode Watch, a searchable data spider of often very revealing SEC form D filings, is the brain child of Denis Papathanasiou, who came up with the idea while researching funding options (a.k.a spying) for his ebooks startup Fifobooks, “I was just using it to keep tabs on specific investors and other competitors in the ebook space, but I mentioned it to a few people, and they were interested enough to want to use it themselves.”
Papathanasiou then added a public API and launched it in beta under its own domain. Right now the site allows a simple search mode which shows results for the past four weeks and then an extended API mode which allows results past that date as well as filtering parameters like “people,”"companies” and “places” (Humans beware: The data is delivered in XML files). → Read More
For some in Silicon Valley, Asia remains an alluring black box. A promising world with pockets of hyper growth, obscured by a tangled web of unfamiliar languages, customs, regulations and native ecosystems. Although the walls are coming down fast, the road to Asia’s markets remains an intimidating one for many.
Enter Dave McClure, founder of 500 Startups (a recently launched $30M super angel fund) and Geeks On A Plane, a program that takes tech entrepreneurs and investors to emerging markets. In its own small way, Geeks On A Plane is attempting to bridge that gap between the Valley and the rest of the world. Earlier this year, roughly 55 “Geeks” traveled to several key hot spots in Asia, including Shanghai, Singapore, Seoul and Beijing, to connect with the region’s top entrepreneurs, to mingle with Secretary of State, Hillary Clinton, and to sample local tech conferences like Shanghai World Expo and CHINICT.
During the journey, Ben Henretig, founder of Micro-Documentaries, followed the group and made four short videos on the trip’s highlights. Jump ahead for our video interview with McClure and the official debut of episode one, Shanghai. → Read More
In January, we broke the news that prolific Silicon Valley angel investor Dave McClure was to set up its own venture capital fund.
Yesterday, the man filed for the fund with the SEC, providing us with more details (hat tip to FormDs.com). The name will be 500 Startups – McClure has long called himself the master of 500 hats – and the initial fund will amount to max. $30 million according to the filing. → Read More
Angel investor, Dave McClure, kicked up some dust this month with his post, “Check-Ins Are Coupons. Game Mechanics Are Bullshit.” His thesis: location based services (LBS) will have to offer real economic incentives if they ever hope to be a mainstream success. Foursquare, with some one million users, is signing up 10,000 to 20,000 new members each day— not too shabby, but it’s certainly no Facebook (try +400 million users). If you need a visual analogy, that’s the equivalent of weighing a male guinea pig (approximately 2 lbs.) against an adult grizzly bear.
McClure predicts that Foursquare, Gowalla and others will have to pony up roughly $5 to $10 per user and $50 to $100 per offline business to bulk up fast. But he’s not condemning the sector, in fact he’s quite bullish. Very bullish. McClure says the location based services market should be worth north of $20 billion and the best LBS could realize valuations of several hundred million dollars based on the potential of the market. All of a sudden, Yahoo!’s rumored $125 million offer to Foursquare sounds downright quaint. Video ahead. → Read More
