[malandrew]

Does it not strike people as somewhat ironic when something like this is written by an investor, a person whose MO is to basically spread risk across a portfolio of companies instead of an entrepreneur like Elon Musk who has actually done what is described in the post time and time again?

Don't get me wrong, I really like DMC, but it strikes me as somewhat contradictory for a piece like this to be written by anyone but a person who consistently/repeatedly spreads risks a lot of what they have on bigger ventures. Once you have an exceptional network and reputation, there are few positions, besides maybe being a lawyer, that come with less risk in Silicon Valley than that of an investor.

[rdl]

He wasn't always an investor, and setting up a new fund/accelerator/etc. is closer to being an entrepreneur than the investor role of a random principal at a big VC.

[rgrieselhuber]

Definitely. A 5 minute conversation with Dave will sound remarkably similar to a 5 minute conversation with other founders - he's always spread too thin, trying to raise money, figuring out the hustle, helping wherever and however he can.

[malandrew]

Agree, however I just don't see where the fear of flying motif comes into play when you don't have all your eggs in one basket. Once a fund is raised it's typically for 10 years. There's a lot of hard steady work to do in those 10 years, but you don't really have a milestone to meet every 12-18 months otherwise you've failed and your business is over.

[borski]

Actually, the milestone you have to meet every 12-18 months, in 500's case, is raising a new fund. Given their speed of investment and quantity, this is an incredibly herculean task. Definitely not easy, and very easy to fail - the failure mode here, of course, being not raising another fund. Sure, the first fund might do well, but 10 years later 500 will have failed as a VC if it has only raised one fund.

[malandrew]

Yes and no. Is it entrepreneurship? Yes. Is it a startup in the Steve Blank sense of the word? No. It's a proven business model that works for those individuals that have a solid reputation and professional network. Is it more risk than being a partner or principal as a big VC? Yes.

Risk-wise, setting up and running your own fund is somewhere between starting a new business with an unproven business model and opting for a career path. IMHO it's not the risk profile described in this post.

[borski]

The business model isn't proven - 500's idea of investing in a lot of companies and looking for lots of singles and doubles, rather than a few home runs, is unusual, unproven, and some would argue impractical. Whether that's true or not remains to be proven, but they've had some (minor) successes so far - sounds a lot like "the first few business deals" to me.

[namank]

I agree with you and in your point lies my biggest beef with most investors, they talk like entrepreneurs but work like bankers. (who knows what they think like)

But I've since learnt that a certain breed of entrepreneur-investors continue to disrupt (innovate) in other ways and in other arenas. One example is 500Startup's overseas initiatives like the one in India.

[jacquesm]

Where do you think investors get the money they invest?