When the 30 startups who make up the current class at the 500 Startups accelerator showed off their products on Tuesday, they spoke to a crowded room of entrepreneurs, reporters, and other Silicon Valley denizens—but it was clear who really mattered.
Every attendee had a name tag, but it was the venture capitalists and angel investors who received tags of a special color (in this case, blue) to make them easier to spot. And even though there's no shortage of incubators in the Valley—programs that usually offer mentorship, desk space, and a small amount of funding to entrepreneurs in their earliest development stage—there still seemed to be plenty of investors looking for the next fledgling Facebook. In attendance were representatives from Sand Hill Road's big names, including Kleiner Perkins Caufield & Byers and Sequoia Capital.
500 Startups founding partner Dave McClure took the stage between presentations, continually urging attendees to make investments. At one point he promised T-shirts to anyone who made a deal for at least $25,000, and at another point he tried to silence the room by declaring, "If you're a startup, shut up. If you're an investor, would you please sit down?"
So did anyone receive a big check? The investors who chatted with Adweek didn't announce any deals, but they seemed positive about most of the presentations and the founders involved. They also voiced a common VC doubt: Are these a real businesses, or just cool ideas?
After the demos, McClure himself acknowledged that some of the accelerator companies are "not going to be the most sexy, not going to be the most techie." So there were companies like Culture Kitchen (ethnic cooking classes) and CraftCoffee (a coffee subscription service). Neither represented a big technical breakthrough, but both got positive buzz.
In part, McClure said that's a reflection of 500 Startups' emphasis on clear business models. He said it may also be related to his efforts to look outside the "geeky" confines of Silicon Valley and recruit more international founders and female founders—and indeed, a number of both were present at the demo day. McClure said he's not doing that out of any altruistic impulse, but rather because he's "selfishly" trying to find companies that other investors have overlooked.
Besides cooking and coffee, other demos the attendees seemed to be talking about were Storytree, which offers an app for sharing multimedia family stories; Singboard, which promises better online karaoke videos; and WillCall, which connects users to that evening's event listings and ticket discounts. And despite McClure's desire for female founders, there was one emphatically male startup called Manpacks, offering delivery of manly goods like underwear, socks, and condoms—perhaps balanced out by Snapette, a mobile app for finding nearby fashion accessories.
Overall, McClure said that 500 Startups seems to have worked out the basic kinks. It's growing, too, roughly doubling the amount of companies incubated from its first class earlier this year. Still, McClure said he wants to do more to help startups with things like distribution and testing. Asked to comment on the unsuccessful standup comedy act which opened demo day, his answer served to describe the incubator as a whole: "We take risks at 500 Startups," McClure said. "It doesn't always work, but we keep rolling."