

Dave McClure's Investment Thesis  - julien
http://www.avc.com/a_vc/2010/07/dave-mcclures-investment-thesis.html

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markbao
> _We are not as interested in smaller revenue focused companies that aim to
> be sold for $25mm to $50mm ... Even so, we will certainly end up with more
> than a few companies that will sell in that range. That is a successful
> outcome for us too if we can own 15-20% of the business and have less than
> $5mm invested, which is the case for many of our companies._

At the high end, $5mm invested at 20% would mean a post-money valuation of $25
million. That's 1-2X. Or am I misunderstanding this?

Though, the multiplier doubles as the amount invested at 20% halves. Since
most of their investments seem to be further away from $5 million, that could
be what I'm overlooking.

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davemc500hats
i think what he's saying is it's an ok outcome if they can return capital (or
slightly better)... likely for the purpose of reinvestment.

however that's not a target outcome, just a tolerable one.

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dmor
USV and Dave are both invested in Twilio, anyone know which other companies
they share?

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davemc500hats
at the moment i think that's the only one, altho we've also invested in
competitors: \- USV in Indeed / me in Simply Hired \- USV in Wesabe / me in
Mint

still i'm a big fan of a lot of companies in their portfolio. Fred, Brad, &
Albert are some of the smartest investors around.

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nrao123
Is Dave the 1st investor to explicitly say and invest in pre-product/market
fit companies? I though First Round Capital also did that but the sense that I
get from reading FRC team blogs is that they are quite hot on investing only
after customer acquisitions costs are lower than life time value I.e. After
they have proven fit.

Is there anybody else other than angels?

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mattew
I love that Dave McClure was able to put together a $30 million dollar fund. I
like the idea of investments being made pre product/market fit, with
subsequent double down investments once the ideas gain traction.

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dharmapu
I like the fact that smaller investments go a great deal in funding tech
startups, bootstrapping is more viable now. The iterative approach is also
critical since most founders cant build the product in one shot

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nivertech
I wander how Dave's pitch deck look like, when he was raising these $30 mil
from institutional investors. I guess one single slide with the word "fuck" in
30pt font ;)

