Some Tips From the Bad Boy Angel Investor, David McClure

The startup world is populated with risk takers and creative people, but Dave McClure stands out from the pack. McClure, co-founder of the angel investment firm 500 Startups, has earned the right to pretty much do what he wants and it seems to be paying off.

500 Startups consists of a team of five that has invested in over 250 companies in just 5 years. Their investments range from $25,000 to $100,000. So far they’ve seen 25 of their companies take off and expect that between 25 and 50 more will follow suit. By all measures, they’re doing really well.

With blog posts and Tweets sprinkled with profanity and statements like “Angel List Fucking Rocks,” McClure has definitely built an image of the bad boy of the investment world.



Here are some straight-talking tips on what he’s looking for:

  1. Quick Learners

One of the reasons McClure likes the learn startup model is it allows him to discover right off the bat how the team operates. With less time to pump out a product, it’s kind of like they’re down to the wire and they need to prove themselves, fast. It also allows McClure and his team to “identify if they’re doing stupid shit.”

Being quick on your feet is essential in the startup world, especially if you’re working on the lean startup model. If you need a lot of time to work through every little detail before you feel prepared, then the somewhat slapdash nature of this field may not be for you.

  1. Money Makers

500 Startups is interested in your idea, if your idea is going to make money. McClure and his team are focused on transactional, subscription or lead-generation type businesses. Examples of companies that have flourished through 500 Startups include 955 Dreams—an app for the iPhone and iPad that creates an interactive music experience—and myGengo, a translation service. These are two very different products but they have one thing in common: they’re bringing in cash.

To put it simply, some ideas can be monetized and some can’t. If your app isn’t going to make money, don’t go knocking on McClure’s door because that’s just not the kind of thing he’s looking for.

  1. Women!

McClure has noticed an increase in female entrepreneurs in the past couple of years and he thinks they’re not getting enough attention. Like any good businessman, he noticed a gap in the market and wants to fill it. Within the companies that 500 Startups has invested in, 45 of them have female CEOs and 70 have female cofounders.

  1. Get in the Network

With over 175 mentors and 400 founders, 500 Startups has an extensive network. McClure says if you want to get his attention, go through one of those people first. Imagine how annoying it would be if you were approached four times just walking down a hallway. Would you take the time to listen to every single pitch or would you brush them off and just get irritated?

Personally I would probably be in a constant aggravated state if I had to deal with that every day. Be smart. Network, network, network.

One last lesson to learn from McClure: 

Be straight up. To put it bluntly, McClure knows that there isn’t a lot of time for bullshit. Be clear, be honest, and be yourself. If his model is anything to go by, the blunt approach may be one to consider.