The federal government is shut down and America's still crawling back from a recession, sure, but don't worry about the assholes in tech: "500 Startups," a venture-capitalism firm whose strategy is more or less to throw money down the toilet in case a killer app is living there, just got a $40 million investment.
It's a given that most startups will fail, and that all it takes is a few smart (lucky?) investments for a VC to make it all worthwhile. Dave McClure's 500 Startups, as the name makes obvious, takes this to the logical extreme, with a throw moneyshit against the wall and see what sticks approach. Now they've got millions more to throw.
The extra $40.1 million 500 Startups pulled down will let it continue its scattershot approach to investing, which is broader than ever, VentureBeat reports:
“Actually we’re getting closer to 600, but no we aren’t changing our name!,” 500 Startups partner Christine Tsai told VentureBeat via email.
Peruse some of these nearly 600 ventures, and you'll see quality varies wildly. You've got semi-established outfits like TaskRabbit alongside these:
A new approach to what the neckwear ownership experience should be, Tie Society was conceived as an alternative to the overpriced and stagnant neckwear retail model.
ChirpMe: Meet new people around you.
Hinge is an app that allows young people who are scared of online dating sites to find dates among friends of friends.
DriveMeCrazy empowers people to report good or bad driving behavior by fellow motorists.
Ain't exactly Palantir in these parts. Some of the companies listed, like Culture Kitchen, have already folded.
But of course this is expected. You can bet strategically, or you can spread your chips all over the table and hope something good happen, somewhere, eventually. It's not exactly scientific, but in the long term, maybe it will work. Maybe. It's hard to imagine how a staff of fewer than 30 people can manage a portfolio of nearly 600 companies with anything even resembling oversight or counsel.
And then there's the question of time. The subtler and I think more damaging factor here is that 500 Startups encourages hundreds of people to pursue ideas that just aren't very good. They don't have to be very good, because simple math says only a handful of these investments ever need to pay off to make the whole bloated enterprise worth it. Worth it for Dave McClure and his investors. But for the rest of the half baked entrepreneurs? It's encouragement toward a brick wall, and time that would've been better spent doing push-ups and selling Tupperware instead of coding an app no one will ever use.
Note: I previously included ViKi in the above list, which was a mistake on my part, because it was sold off for $200 million.
Photo: Getty/Hulton Archive