Investing in women and minorities is no social mission — there’s money there.
That’s according to venture capitalist Dave McClure, who heads up 500 Startups.
“I’m a greedy f***ing bastard,” he said at TechCrunch Disrupt on Tuesday.
500 Startups is an investor and an early-stage accelerator — it’s graduated over 400 companies from its locations in Mountain View, San Francisco and Mexico City.
According to McClure, 500 Startups differentiates itself from the typical Silicon Valley backer because it embraces atypical startups — those abroad and those led by women and minorities. (And this isn’t the result of the recent push for diversity in tech — it’s been the firm’s focus since the start.)
It’s invested in 1,000 startups in the last five years. Of those, 250 include female founders — and over 150 have a female CEO. It’s also made a significant investment in global startups: 100 each in Asia, Latin America and Europe/the Middle East, McClure said.
“We’re doing this because we think we’re going to make money. For the same reason we invest in women and minorities,” he said. “We think they’re under-priced assets that the rest of the world is missing.”
McClure said many U.S investors are too myopic and have a hard time seeing startups beyond Silicon Valley, New York or London.
“[But] there are lots of geographies around the world that are going to be really, really big,” he said.
Keeping an eye on places like Nigeria, Pakistan, Iran, Turkey, Brazil — just some of those McClure mentioned — could be an investor’s paradise.
“There is nowhere near the amount of capital in those markets as there is potential that’s coming in the next three to five years,” he said.
Last week, the firm announced a new micro-fund in Thailand for $10 million. Earlier this year, it announced one for $15 million in South Korea.
500 Startups’ internal makeup is also diverse — 40% of its 50-person team are women. They reside in 12 countries and speak more than twenty languages combined.
“We have put more airline miles behind us than a sassy flight attendant spanning the globe to identify the next generation of kick-ass founders,” according to a blog post Tuesday.
Of its 1,000 companies, McClure said 300 have failed. It’s invested in two “unicorns” — those worth over a billion dollars (Credit Karma and Twillio) — and at least 20 “centaurs” — those worth over $100 million.
“We also have lots of My Little Ponies,” McClure said. “It’s everything that’s not a centaur or unicorn but where we think we’re going to make money.”
McClure added that while some investors look to the past when informing their investments, this approach is flawed.
“If you’re looking backward for the map for the future, you’re going to be looking up your own a**hole,” he said.