93. What’s Wrong with Venture? Part 1 (Dave McClure)

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Welcome back to TFR.  We’ve got a good one today as we welcome one of the most respected and polarizing figures in venture, Dave McClure, to the program.  Dave, of course, is a founding partner at 500 startups and, with Christine Tsai, they have built an organization that may be the most active startup investor in the world.  In this interview, we will discuss ‘What’s Wrong w/ Venture?’  We discuss issues on the investor-side, on the founder-side and how 500 is setup to address some of those issues.  We cover:

  • McClure What's Wrong with Venture?What Dave worked on and who Dave worked with in the early days at Paypal
  • Why Dave thinks most VCs are lazy and not innovative
  • The ways he’s been innovative in this asset class where others have not
  • If he invests in ideas and how early he’s willing to go
  • Other problematic and frustrating practices by VCs
  • If he thinks that LP influence is driving VC fund strategy
  • If the influx of capital from new, early-stage angels is positive or negative
  • Why valuations have adjusted down so significantly, particularly w/ SaaS companies
  • And we’ll wrap up part 1 of the interview w/ Dave’s response to Bill Gurley’s position that current founders have never experienced a difficult fundraising environment, resulting in dirty term sheets, instead of just raising at lower valuations

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