Here are a couple sources that explain why Dave McClure felt that an application was necessary and how they will be handling the process through AngelList.
This is my kind of application. This is similar to TechStars's application question "Why should we accept you?" which is great since you can candidly answer why you are a good investment.
Question that may seem obvious (sorry if it is). Is this intended for existing startups that have already gotten their feet wet, or is it intended for people with ideas & elevator pitches?
we usually prefer you have:
1) a functional prototype
1.1) or you've built products w/ previous traction
2) a team which includes one engineer at a minimum
2.1) ideally + designer + cust acquisition), and
3) some # of users (not your mom or your friends)
3.1) ideally some revenue too
4) have a business model / revenue model
4.1) or, shitloads of traction if not
5) some moxie.
Well, we'd shoot a team video, but we're in the process of relocating our startup so we're a little disparate. I guess you'll just have to interview us :)
Don't worry, I had the same question.
From what I can tell, 500 Startups prefers if you've already been incorporated, (unlike YC) but I'd be surprised if they won't help you incorporate if they like you.
I was in the previous batch @ 500startups and I don't think any of the ~28 companies had a solo founder. Doesn't really answer your question but just an FYI.
TNW: http://thenextweb.com/insider/2012/09/13/500-startups-breaks...
TechCrunch: http://techcrunch.com/2012/09/13/500-startups-angellist/