Now that the 500 Startups accelerator has met its initial goal of funding 500 companies, Dave McClure, founding partner, says he is launching two new syndicates. One is being put in place to increase diversity in startups.
Naval Ravikant’s AngelList syndicates—groups within AngelList—will enable the opportunity for investors to invite others to co-invest in other firms. 500 Startups announced the launch of a general 500 Startups fund, as well as a 500 Women fund that is focused on firms with at least one female founder who owns no less than 10 percent of the company. McClure seeks increased diversity in the startup community.
The two AngelList syndicates will enable 500 Startups to help its limited partners, mentors, founders, and other investors quickly and simply co-invest with 500 Startups partners, explained TheNextWeb.com. Each syndicate will be allocated $1 million; each funded company will receive $250,000-$500,000.
The Syndicates platform invests in 10-20 companies month, making it an ideal pairing with 500 Startups. “A lot of our investors want access to the deals we’re doing, and we’re not always able to get them in fast enough,” said McClure. “Now it’s a much more efficient process.” 500 Startups plans to cover around $50,000 to $100,000 per company, while co-investors will pitch in $200,000 to $400,000.”
500 Startups has long supported female entrepreneurs, consistent with now devoting a complete syndicate to this demographic. Last October, 500 Startups partner Christine Tsai, told PandoDaily’s David Holmes that some 25-30 percent of its accelerator and seed companies all have at least one female founder, which is significantly higher than the 13 percent average seen in United States venture deals.
According to McClure, the move toward investing in women-fronted firms is smart business, not a way in which to improve image or appear charitable. “Smart women entrepreneurs are not getting the access to capital they could,” McClure said. “We are not theorizing women are a good bet, we have proof they are a good bet,” he added, noting a number of successful prior investments by 500 Startups that all were women-founded. 500 Startups is looking into future launches, depending on the syndicates success, including in areas such as ecommerce, video, and education, as well as in specific regions, including Latin America.
“Diversity is not a tactic or strategy, rather it is at the core of what we believe, and what we desire. Diversity is not even a choice, rather it is the most natural expression of who we are as humans, at our best and worst — curious, selfish, giving, greedy, loving, lusting, proud, humble, fearful, angry, happy, hungry, lazy, hateful, despicable… and wonderful human beings,” posted McClure.
Holmes, David. “500 Startups launches AngelList Syndicate for Female Entrepreneurs“; PandoDaily. February 13, 2014.
Yeung, Ken. “500 Startups Looks to Help Fund Women-Led Startups With New $1M AngelList Syndicate“; TheNextWeb. February 13, 2014;.