Disclosure #1 — I am an LP in 500 Startups.
Disclosure #2 — If I were a wealthier man, I would put more money into 500 Startups.
The world gives us very few risk takers.
But it does give us a lot of people who think that they are risk takers.
For every entrepreneur… there are nine people who show up at parties, networking events, and demo days talking about their great app idea, and how they are almost ready to quit their job at Google or Goldman Sachs to pursue it.
For every investor… there are nine “venture capitalists” who never offer term sheets until somebody else does first, and they don’t touch any deal that their associate can’t comp against something just like it.
For every writer… there are nine would-be “thought leaders” who publish the occasional gelded article that takes no strong position whatsoever, and gingerly waltzes from one uncontroversial hackneyed point to another.
Sometimes I am the “one,” and sometimes I am the “nine”.
Two months ago, I wrote an article about gender. It was a pretty good article that got a fair amount of traffic. It wasn’t my best article, and far from my most popular. It was a topic that I wanted to write about, but I was terrified of saying the wrong thing or stating something improperly. Sarah helped me revise it eight times, until finally telling me to publish the damn thing. I was still pissing my pants as it entered print.
Dave McClure wrote a better article about gender. It’s located here, and you should read it.
His article was better, because he is always the “one”, never the “nine”.
Right now, Dave McClure is getting a lot of negative press, because he called a female audience member a “lying bitch”.
He’s getting negative press, because he deserves to get negative press. That’s what happens sometimes when you say stupid things. I got negative attention earlier this week when I stupidly phrased my opinion about engineering degrees.
But, that’s what real risk takers do. They do stupid things. They start bad companies. They invest in bad companies. They write bad articles or say stupid things on stage. Most people are too wussy to get on a stage, so they never say stupid things on one.
But Dave McClure does a lot of stupid shit.
One stupid, insane startup he invested in was MakerBot; the idea made no sense at all, which is why very few big investors participated in the angel round. My cousin Jake, who does equally crazy things, was the first person to put his money into MakerBot, and he told my family about it. But the idea seemed too absurd. Honestly, the Goldberg money seemed better invested on the “23” square of a Roulette table. MakerBot’s product was some robot kit that you assemble to print 3D versions of stupid shit that nobody needs… blah, blah, blah.
In other words, it was no ‘Daily Deals’ or ‘Casual Gaming’ company!
The round wasn’t lead by Sequoia Capital or Ron Conway. It was lead by a woman named Shana Fisher who nobody had ever heard of — in fact, few people still have — despite the fact that she is, by every objective metric, the most successful angel investor on the planet.
And when Dave McClure isn’t degrading women (and men), or investing alongside women like Shana, he’s putting money into their companies.
One company that Dave McClure invested in was TheMuse.
The woman who founded the company, Kathryn Minshew, looks like a VC’s dream come true. She’s a regular on all those “Top Young People” and “Top Women” lists, Forbes, BusinessInsider, Bloomberg, Inc Magazine, etc. She has a top degree, is a McKinsey alum, and her website is doing extremely well. She graduated from Y-Combinator. She works her ass off. She’s supposed to be the type of person that you invest in.
But in the beginning, not very many people did. You can read about it here.
Dave McClure didn’t wait for SV Angel, First Round, and True Ventures to get the deal and then sneak onto the cap table in the final hour.
He put his money where his dirty mouth is.
And now he is glad that he did, because the company is growing fast, and it has a genuinely ingenious approach to connecting smart people with great jobs — the type of company that could well become the next Monster.com.
According to Kathryn: “500 Startups’ portfolio has come the closest to representing the diversity of the startup community as any I have seen. Dave McClure really ‘gets it’. He and Paul Singh [another 500 startups founder] took a bet on us long before our seed round became oversubscribed.”
For those of us who have actually started companies, the first person to say “yes” is your real investor. They don’t make any more money than the last person who gets into the round… but you’re damn thankful for them. And you tell other founders about them.
But today, the people of Silicon Valley aren’t talking about Dave’s investments or his demonstrated support for women.
They are talking about how Dave McClure’s gastroenterologist is still busy extracting the investor’s foot from the deep corners of his stomach.
And if those ‘90%er’ VC’s — who sit around and kibitz about Dave McClure’s stage antics while not making very many investments themselves — suddenly retired tomorrow, would any of us real entrepreneurs give a shit?
Wouldn’t some cardboard associate who worked at Morgan Stanley, before transitioning to private equity, and ultimately VC, just step in and take up the mantle of an inflated “partner” title?
But people pay attention to Dave McClure, because he is worth paying attention to — and, as far as my money is concerned, he is worth investing in…
… because he is going to keep doing stupid shit.
Final Disclosure — Dave McClure doesn’t know that I am writing this, and I don’t really give a crap about his reaction to it.