[davemc500hats]

due diligence is much better in the rear-view mirror, IMHO.

our 2nd check is a great confirmation of whether we were right or not... happens ~20-30% of time after 1st check.

"500 due diligence = mentor filters + quick 1st check, followed by thoughtful 2nd check based on metrics"

[SandersAK]

This is pretty interesting. It's kinda like high stakes online poker where you take luck out of the equation by playing thousands and thousands of hands.

Basically, you're going to have a run of bad cards (companies) and a run of good ones. But if your decisions are consistent, and adjust to migrate towards successes, you'll end up ahead no matter what... assuming you're moving in that direction.

It's really not spray and pray, just as high stakes poker doesn't really have anything to do with luck.

[staunch]

So what are your thoughts on the "signaling" issue if you only follow on in 20-30%? What do you recommend the other 70-80% tell investors?

[davemc500hats]

1) we are quite clear with our companies that we are aligned in the goal that they need to perform to receive future funding from 500 (as well as others)

2) 500 is usually a minority investor in following rounds, so decisions still likely made primarily be lead investor

3) if companies and follow-on investors are more worried about our decisions & subjective assessments rather than the company fundamental business metrics, then there is already a problem.

we are in this business to be successful and make money. much as aim to help all of our founders, we sincerely hope they are too.