500 Startups Application and Portfolio | The most successful 500 startups

500 startups application

In 2015, 500 Startups generated ~$14M in sales from several sources including control fees, accelerator event tuition, events & conferences, partnerships & sponsorship’s, & education. In the future, they may also make money based on carrying (aka income) from their investments. In 2016 they estimated total finances will grow to $20-25M+ from increases in workforce, budget under management, and different programs & services.

Historically, most of their price range has come from 3 number one sources: mgmt charges from their funding finances, tuition fees that cover their accelerator programs, and attendance revenue & sponsorships from their occasions & conferences. Last year they additionally commenced getting cash from customer acquisition/boom advertising and marketing consulting & investor education.

Their resources of sales in 2015 are designated below:

1) ~$6M came from control charges from their finances, which totaled ~$200M in 2015. (their price structure averages ~2%/12 months, altho it starts off evolved at 3%/12 months after which decreases over time). As the quantity of capital below control grows, their sales on this vicinity will also grow (altho word that their primary purpose is to make cash on earnings from their investments, aka “convey”, see below)

2) ~$4M came from accelerator application tuition, at a price of ~$25k per team (notice: as of July 2015, we invest $125K much less tuition cost of $25K for a net $100K, usually for 5% equity). $125K is going to the agency as an investment, of which $25K is going to their incubator LLC to cowl workplace space, staff support, distro crew, alongside different amenities & costs. they presently run 4 batches in keeping with 12 months out of their Mountain View & San Francisco offices (~40 co’s x 4 batches/yr = ~a hundred and sixty co’s * $25K) = ~$4M/12 months. Note that their fees for jogging the accelerator application are around $5M/year, so we are possibly still strolling at a moderate loss in this vicinity.

3) ~$3M came from their occasions, which includes their PreMoney conferences, their growth advertising, and marketing or “DISTRO” events, their GeeksOnaPlane trips, and different in-character events & conferences. maximum events run destroy-even or make modest earnings, altho generally, they optimize for audience reach over earnings (in particular where the target market is founders, geeks, or designers who don’t have much money yet). Sponsorships come from companies like Amazon, Rackspace, Mailchimp & others (thanks!), and additionally from some of their investors.

4) ~$1M got here from client acquisition/growth advertising consulting sales generated via their “DISTRO” group, which matches with their portfolio corporations to increase clients and revenue. In 2016 they count on sales in this region to develop substantially because of increases in their team size.

In 2015 their group of ~100 people operated on overall finance of ~$17M, approximately 2/3 of which went to human beings & salaries, and 1/3 to workplace area and different non-humans stuff. As a result of spending $17M and bring in $14M, they operated at a loss of ~$3M in 2015, which they financed through debt. they expected that they might also retain to perform at a moderate loss in 2016, altho they also count on revenue to develop to $20-25M. they will probably add at least another 30-50 human beings to the crew as well, possibly more.

Note in the future, they are hoping to generate revenue on income (aka “bring”) from investment returns, altho that is possibly still a few years away for the reason that their 1st fund is only ~6 years old and their 2d fund is ~4 years antique. If they are lucky in returning >1x their fund capital, they make ~20-30% of any income they generated from funds lower back on funding, after protecting their fund expenses. typically most funds don’t see any bring until 7-8 years into operation (& indeed a few price range never get to bring, ever).

(ex: for a 10-yr fund of size $50M, if we go back $100M, earnings would be ~$50M, and convey might be 20% of that or ~$10M. Amortized over the 10-yr lifestyles of the fund we’d make ~$1M/12 months, or perhaps slightly extra if they go back capital to their investors earlier than 10 years. If they are not worthwhile on fund investments, then they get not anything from bring — zip, zilch, nada, bupkus).

What is the reputation of 500 Startups?

Let’s restate the query for clarity’s sake, and so that we do not make this thread a love-fest for 500: What is the popularity of 500 Startups?

If they’re sincere here, the reputation of 500 Startups is mixed, however, it doesn’t want to be – it is simply mismanaged at the moment. A few small tweaks would permit the program and community to shine. I am writing this because I individually see the fee of the five hundred crew, the individual crew members, the mentors, and the agencies, of course, however, the fact is that for most of 500’s “customers,” that is investors, potential recruits, and M&A departments, 500 has the raw materials to make something terrific but, today is a long way too disorganized for someone without proper context to digest properly.

I don’t see this as a long-term or problem that can’t be corrected. Therefore, I’ll without a doubt offer three (3) friendly hints that I suppose might make a metric ton of difference and help every person involved:
500 needs to rent a pro COO and supply this individual a healthy quantity of operational and procedure control, in addition to an assistant to deal with scheduling, messaging, e-mail, and all different coordination-based tasks.
500 desires to reorganize and remodel its internet site and email communications, mainly invitations for demo days, activities, and the like. This will make sure that proper humans are invited and attend events.
Founders who input the 500 applications have to be fully aware of the signaling advantages and signaling dangers that are associated with being on this incubator. This is a complex topic. On the one hand, that is a selective incubator; on the alternative hand, newshounds, investors, and potential employees without proper context are confused about 500’s lifestyle and pace. This isn’t always a bad factor but can lead to misconceptions and capacity misalignment when there may be a fit and a job it is offered. The pleasant element of a founder in the 500 application can do is to track out 99% of the noise, different agencies, mentors, Twitter, activities, etc. in order to create and add value for their markets.

500 has been around for a while now and I agree with it’s in the fine hobby of the 500 teams, the five hundred family, and the ecosystem at large for those three points above to be addressed. 500 has this kind of strong foundation, it’s a shame that only a small lack of corporation distorts the message and possibilities for founders, personnel, investors, and bloggers/reporters who need to see it hold to succeed.

How do 500 Startups decide the credibility of the group approaching them for their accelerator application? Should I wait and approach 500 Startups or go with the accelerator that selected my startup?

There are several factors that affect their opinion of teams that apply for 500 Startups They usually look for as follows:

0) objective, provable evidence you’re awesome, this is indisputable & does not depend on all people’s opinion (ex: “I sold an agency for $100M, I created Ruby, I constructed an Eiffel Tower model out of popsicle sticks when I used to be 7”)

if there isn’t always objective evidence, then we adore to pay attention first-hand references that you are awesome, ideally from human beings we know, and preferably in a work situation:

1) are there existing “500 Family” (their crew, their founders, or mentors) who have had a superb WORK-ing courting with you, and are inclined to comment positively about your skills/experience?
2) alternately, are there 500 Family members who have a NON-working or private dating with you, and could remark positively?
three) alternately are there non-500 Family members who have a WORK-ing courting with you, and will comment positively?
4) is there ANYONE who will say ANYTHING effective, regardless of whether or not they have labored with you?
In summary, they care approximately:
zero) indisputable, objective proof that you are awesome, OR
1) human beings in 500 Family who will reference a high-quality running courting, OR
2, 3) different non-500 humans OR different non-paintings dating, OR
four) everybody who thinks you smell nice & isn’t an entire idiot (like, your mom)

word: zero or 1 is nice.

What have been the most successful 500 startups companies so far?

1 exit >$1B (Unicorns):

Twilio (NYSE: TWLO), IPO June 2016
6 exits >$100M (Centaurs):

MakerBot, acq SSYS $402M, June 2013
Wildfire, acq GOOG $350M, July 2012
Viki, acq Rakuten $200M, Sept 2013
Behance, acq ADBE ~$150M, Dec 2012
Simple, acq BBVA $117M, Feb 2014
Sunrise, acq MSFT $100M, Feb, 2015
30+ exits <$100M (Ponies):

AppStores (acq InMobi)
Backtype (acq Twitter)
Blink Booking (acq Groupon)
Brightnest (acq Angie’s List)
Cardmunch (acq LinkedIn)
Connected (acq LinkedIn)
Creative Market (acq Autodesk)
Crocodoc (acq Box)
FeeFighters (acq Groupon)
Flowtown (acq DemandForce/Intuit)
Foodspotting (acq OpenTable)
Gyft (acq First Data)
Khush (acq Smule)
Lagoa (acq Autodesk)
Lettuce (acq Intuit)
Lexity (acq Yahoo)
Lightbox (acq Facebook)
Little Eye Labs (acq Facebook)
Lovely (acq RentPath)
Moonfruit (acq YELL Group)
Other Inbox (acq ReturnPath)
Punchd (acq Google)
Quipper (acq Recruit)
Rapportive (acq LinkedIn)
Streem (acq Box)
TasteSpace (acq DeliveryHero)
TeachStreet (acq Amazon)
TinyPost (acq TripAdvisor)
TouristEye (acq LonelyPlanet)
Versly (acq Cisco)
Vessel (acq Marketo)
Zappli (acq Shopzilla)
Zencoder (acq Brightcove)
ZipDial (acq Twitter)
other up & coming 500 Unicorns & Centaurs:

Credit Karma (Founders Fund, Felicis, QED, Google, Tiger)
Grab, aka GrabTaxi (Vertex, GGV, Tiger, Softbank)
Sendgrid (Techstars, Foundry, Bessemer)
Ipsy (Crosscut, Bullpen, Sherpa, TPG)
Intercom (Freestyle, Social+Capital, Bessemer)
Udemy (MHS, Lightbank, Norwest, Insight)
PlanGrid (YC, Sequoia)
TalkDesk (Storm, DFJ, SalesForce)
Smule (Bessemer, Floodgate, Shasta)
Remind (First Round, Social+Capital, KP)
VivaReal (Monashees, Kaszek, Valiant, Spark)
WePay (YC, August, Highland, Ignition, FTV)
Virool (YC, Fabrice Grinda, Menlo, DFJ, DST)
BarkBox (Bertelsmann, RRE, Lerer, Polaris)
TheRealReal (Greycroft, Canaan, Industry, Interwest)
Tradesy (Launchpad, Rincon, KP)
Life360 (fbFund, Bullpen, DCM, Bessemer)
Peertransfer (Spark, Maveron, Accel, QED, Bain)
Vungle (AngelPad, SoftTech, Google, Crosslink)
eLaCarte (YC, Lightbank, Intel)
Gengo (Atomico, Intel, NTT, Iris)
Bustle (Social+Capital, General Catalyst)
Zozi (Launch Capital, ZIG Capital)
ContaAzul (Monashees, Ribbit)
ToutApp (Founder Collective, Sigma West, A16Z)
Mayvenn (Base, Launch Capital, Silicon Badia)
OwnLocal (YC, Lerer, Baseline)

How are the applications to 500 startups reviewed?

Great question. There are a couple of key steps. Application -> fit check -> stage check -> idea check -> interviews 1, 2, (3) -> offer.
When you apply – whether it is on the2ir website or via a referral – you get triage to the same place. they review the profile of your company. The first step is to check for the fit of a given business. They primarily invest in software companies (and have more recently done more hardware investments) But, for example, they do not invest in brick & mortar companies, pharma, etc. If this isn’t a good fit, we’ll let you know at this point.

Next, they check for the stage. If you’re just at the idea-stage — i.e. you have not done anything but think up your idea — this is going to be too early for us. I’d recommend going to an incubator to get your idea off the ground. If you have some progress — it could be revenue traction or other forms of traction such as getting licenses/approvals / etc — they then assess whether they think it’s the right point for us to get involved.
Next, they do a quick idea check. Does this seem like it could be “big” / in a big market? This is a really loose check because frankly, no one actually knows, and we’d rather give people the benefit of the doubt and send them on to the next stage.

Then they go into the first interview stage. The first interview is typically 20–40 minutes, and they ask general business questions about your team / why you’re doing this, your market, your product / how it’s differentiated, etc… We can do this in-person or via Skype — we’re very comfortable doing Skype calls.

If the team does well, they send the company on to the next interview, which is generally more focused on customer acquisition. Who is your target customer? Why are they using this / buying? What does it cost to get a customer? Through what channel(s)? Etc…
If they still have questions, they may ask them via email or another interview.

Finally, they decide whether or not to make an offer to invest.

Once your application gets picked up, the process is really quick from start to close. In fact, they will only look at each application for no more than 30s each! so it’s important to mention everything you think is important. Bullet points are ok.

Lastly, if you have updates to your business, please do let the, know that you’ve applied and that you have a new update at referring [at]500startups[dot]com. They actually see the application process as continuous rather than a fixed decision point.

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