The life of VCs: It ain’t easy being the middleman

Photo credit: Lloyd Chapman

Venture capital firms don’t have it easy. As anyone in the know can tell you, venture capitalism is a risky business, and that’s without even factoring in the precarious balancing act between wooing limited partners and supporting startups. Somehow, though, early-stage venture fund 500 Startups has managed to more than hold its ground.

In the space of six short years, what was formerly only a glittering vision of promise in founders Dave McClure and Christine Tsai’s minds has morphed into an industry stalwart with US$250 million in assets under management and interests in practically every corner of the globe. Sporting adorable names like 500 Durians (for Southeast Asia) and 500 Tuktuks (for Thailand), 500 Startups’ main fund and 10 micro funds have enabled them to plant the seeds of growth in many a groundbreaking startup.

Behind the success story

Over 1,500 startups have benefited from the discerning look of 500 Startups’ fund managers. And the firm doesn’t restrict its operations to the tried-and-tested markets of North America and Europe, either. Figures reveal 500 Startups to be the most active investor in Southeast Asian startups for the second quarter of 2016. Ride-hailing app Grab (19 million downloads across 30 Asian cities) and video-streaming platform Viki (acquired by Japanese giant Rakuten for $200 million in 2013) are two of their biggest finds.

In fact, the firm’s Southeast Asian fund 500 Durians has moved forward at a breakneck pace, doubling its total number of investees from 2014 to 2015. This strategy of rapid diversification may not sit well with those accustomed to a more measured approach, but Dave has gone on the record to extoll the benefits of keeping one’s options open during the seed stages.

The strategy is paying off. With a more diverse portfolio, 500 Startups statistically increased its chances of discovering that one startup in a million capable of exponentially increasing investment returns.

The rest, as they say, is history.

But how do they do it?

Exactly how 500 Startups does what it does is probably the question on the cusp of tumbling from your lips now.

We can’t guarantee that the folks at 500 Startups will tell you everything you want to know, but they are giving a talk at Tech in Asia Tokyo 2016 titled ‘Inside 500 Startups’.

Slated to take place on Day 2 of the conference (September 7), the session will feature the 500 team conversing about their successes and more importantly, share some of the most challenging obstacles faced by the firm in the last couple of years, which could strike a chord with you – whether you’re an investor or a startup.

Joining the panel are:

• Dave McClure, Founding Partner
• Emily Chiu, Partner (Corporate Development, M&A)
• James Riney, Head of 500 Startups Japan
• Vishal Harnal, Venture Partner (Southeast Asia)
• Pankaj Jain, Partner (India)

If you’d like to learn more about the 500 Startups experience, passes to the event begin at US$199 (before discount) for startups. Simply use the promo code tiatokyo10 during your purchase to enjoy a final 10 percent discount that ends today, August 26, 11:59 PM, GMT +8.