

500 Startups Open for Applications - mikeleeorg
http://500.co/2013/01/31/applications-open-for-500strong-starfleet-academy/

======
clbrook
FAQ says that they charge $6,000 per founder and $3,000 per non-founder to
participate in the accelerator program.

Do most accelerators charge you to participate in them, while at the same time
investing ~$50,000 for 5% equity?

~~~
rdl
Y Combinator doesn't charge you anything, but gives less cash for roughly the
same equity. I don't know about Tech Stars. I think Founder Institute charges
and doesn't invest, but I don't know their terms, and they're not really an
accelerator.

It's normal for VCs in Series A to bill you for their legal expenses. Maybe
that's a similar kind of thing to giving money and then charging back for
expenses. It's obvious that accelerators have per-participant expenses; it's
up to them and their LPs whether they should cover it by recouping from
portfolio vs. overhead.

I don't think this term would influence my decision to participate or not. If
an accelerator isn't a clear yes (massively increasingly your odds of success,
raising your investment valuation, etc., far beyond what it costs), it's a no.

For Y Combinator, I'd say it's a clear yes. For a lot of the other
accelerators, it's a no. I've heard good things about 500 Startups from other
people I know who have participated.

~~~
clbrook
Thanks for all of the information. Now that I understand why these are the
terms it makes more sense.

------
bsenftner
Why does 500 Startups feel like a funnel for getting taken advantage of?

Oh my, just started reading the FAQ. Bad terms. Very bad.

~~~
cloudwalking
What specifically is bad about them?

~~~
rhizome
Pay to play.

~~~
friendstock
Not at all!

If 500 Startups funds a company ($50,000) to join the accelerator, it will
charge fees to help cover the costs of running the accelerator office space.

~~~
bennyg
Why don't they just give the company the net then? Free + $35k is better
psychologically than "$50k but we'll be taking some back."

~~~
fredoliveira
It keeps the company in check. It reminds the company that expenses come with
the business. It forces founders to be mindful of what they're getting. It
makes everyone realize that they're being invested in as much as they're
investing too.

I don't care if psychologically $35k sounds better than $50k minus expenses to
you. It makes for better founders and better companies. You should think about
it from this perspective.

~~~
rhizome
_It makes for better founders and better companies._

Can you explain this part a little more?

------
skbohra123
There's something about 500.co and it's members which makes me think of them
as a totally different cult, very closed group of people, arrogant and somehow
not a very good feeling about them. It must be just me.

~~~
PakG1
I saw a live stream of 500s presentations. There was a guy who couldn't stop
swearing. I have nothing against swearing if there's good reason for it (eg.
someone's really truly upset and needs to communicate how upset they are), but
for a pitch to outsiders? It really bugged me. I guess for similar reasons, I
love HN because it is really civil compared to other forums on the web; many
other places (excluding quora), the trolls seem to run wild.

I don't want to think all 500s participants are like that, but it rubbed me
the wrong way. It seemed childish, like, "I'm cool because I can swear, check
me out!" I don't think I should let it colour the way I think about all 500s
participants, but for some reason, it's a permanent link in my mind whenever
500s is brought up.

~~~
davidw
They seem like they're actually a pretty good outfit, but Dave McClure is
known for communications chock full of explitives. I don't have problems with
those words - they're pretty effective when used in the right way - but they
kind of lose their meaning when used in those quantities.

Seems like sort of a minor detail though if they do a good job otherwise.

------
jimzvz
Have any foreign companies successfully applied? How do they handle visas,
company location etc.?

~~~
edowling
As other commenters have pointed out, 500 is way more international than YC.
Over half of the companies in the current batch (of which I am one) are
international. Dave McClure, Paul Singh, etc spend HUGE amounts of time
travelling the world looking for the best trends and startups. In that sense,
they select from a much wider field of applicants.

500 itself has no problem giving money to international companies - however,
most companies flip-up or establish in the US to make it easier for other
investors. It does depend on the company though. Some companies come to the US
to enhance their network, not necessarily to crack into the US market, so
setting up shop here legally doesn't make sense.

For visas - they provide references, etc that are needed and are very quick
and responsive about it. That said, they will not "sponsor" you to come in on
an H1-B or anything like that.

~~~
jimzvz
Thanks for the info!

------
10dpd
Hmm <http://news.500.co> seems to be down.. :)

