The document outlines 500 Startups, a $40 million seed fund that invests small amounts in many early stage companies through an accelerator program that provides funding, mentoring, and office space in exchange for 5% equity, with the goal of identifying high growth companies through quantitative and high-volume investing.

1. 500 Startups
Fund I
Ideas Inc.
Spoondate Founders meet
with investor McClure, right
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2. Legal Notice
THIS PRESENTATION IS BEING DELIVERED TO PROSPECTIVE INVESTORS ON A CONFIDENTIAL BASIS SO THAT THEY MAY CONSIDER AN INVESTMENT IN PIRATE FUND I, L.P. (THE "FUND"). THESE
MATERIALS DO NOT PURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL THE INFORMATION THAT A PROSPECTIVE INVESTOR MAY DESIRE IN INVESTIGATING THE FUND. THESE MATERIALS ARE
MERELY FOR PRELIMINARY DISCUSSION ONLY AND MAY NOT BE RELIED UPON FOR MAKING ANY INVESTMENT DECISION WITH RESPECT TO THE FUND. RATHER, PROSPECTIVE INVESTORS SHOULD
RELY ON THE DEFINITIVE LIMITED PARTNERSHIP AGREEMENT OF THE FUND (THE "PARTNERSHIP AGREEMENT") AND THEIR OWN INDEPENDENT INVESTIGATION OF THE FUND, THE FUND’S GENERAL
PARTNER (THE “GENERAL PARTNER”), ITS FAMILY OF FUNDS AND THE MANAGERS THEREOF AS THE BASIS FOR MAKING AN INVESTMENT IN THE FUND.
THIS PRESENTATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PARTNERSHIP AGREEMENT. IN ORDER TO EFFECTUATE ITS INVESTMENT IN THE FUND, A PROSPECTIVE INVESTOR WILL
BE REQUIRED TO EXECUTE THE PARTNERSHIP AGREEMENT AND OTHER SUBSCRIPTION DOCUMENTS, AS APPLICABLE. IN THE EVENT THAT ANY OF THE TERMS OF THIS PRESENTATION ARE
INCONSISTENT WITH OR CONTRARY TO THE PARTNERSHIP AGREEMENT, THE PARTNERSHIP AGREEMENT SHALL CONTROL.
THE LIMITED PARTNER INTERESTS IN THE FUND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, NOR HAVE
SUCH LIMITED PARTNER INTERESTS BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR THE SECURITIES REGULATORY
AUTHORITY OF ANY STATE. NEITHER THE SEC NOR ANY COMMISSIONER OF ANY SUCH STATE AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRESENTATION, AND ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF INTEREST TO PURCHASE ANY SECURITIES OR
INVESTMENT ADVISORY SERVICES IN ANY STATE OR IN ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
THIS PRESENTATION MAY CONTAIN “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, AS AMENDED. BECAUSE SUCH
FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, ACTUAL RESULTS OF THE FUND MAY DIFFER MATERIALLY FROM ANY EXPECTATIONS, PROJECTIONS OR PREDICTIONS MADE
OR IMPLICATED IN SUCH FORWARD-LOOKING STATEMENTS. PROSPECTIVE INVESTORS ARE THEREFORE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS.
IN ADDITION, IN CONSIDERING THE PRIOR PERFORMANCE INFORMATION CONTAINED IN THIS PRESENTATION, PROSPECTIVE INVESTORS SHOULD BEAR IN MIND THAT PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL ACHIEVE RESULTS COMPARABLE TO THOSE OF ANY PRIOR OR EXISTING FUND OF THE
FIRM OR ITS PRINCIPALS.
THE SUBJECT MATTER OF THIS PRESENTATION IS EVOLVING AND SUBJECT TO FURTHER CHANGE BY THE GENERAL PARTNER OF THE FUND IN ITS SOLE AND ABSOLUTE DISCRETION; PROVIDED,
HOWEVER, THAT, EXCEPT AS OTHERWISE INDICATED HEREIN, THIS PRESENTATION SPEAKS AS OF THE DATE HEREOF AND NEITHER THE GENERAL PARTNER OF THE FUND NOR ANY AFFILIATE OR
REPRESENTATIVE THEREOF ASSUMES ANY OBLIGATION TO PROVIDE ANY RECIPIENT OF THIS PRESENTATION WITH SUBSEQUENT REVISIONS OR UPDATES TO ANY HISTORICAL OR FORWARD-
LOOKING INFORMATION CONTAINED IN THIS PRESENTATION TO REFLECT THE OCCURRENCE OF EVENTS AND/OR CHANGES IN CIRCUMSTANCES AFTER THE DATE HEREOF.
THE INFORMATION CONTAINED IN THIS PRESENTATION HAS BEEN COMPILED FROM SOURCES REASONABLY BELIEVED RELIABLE.
THIS PRESENTATION IS EXCLUSIVELY FOR THE USE OF THE PARTY OR PARTIES TO WHOM IT HAS BEEN PROVIDED BY THE GENERAL PARTNER. BY ACCEPTING THIS PRESENTATION, THE RECIPIENT
ACKNOWLEDGES AND AGREES THAT HE, SHE OR IT (A) WILL MAINTAIN THE INFORMATION AND DATA CONTAINED HEREIN IN THE STRICTEST OF CONFIDENCE AND WILL NOT, IN ANY CIRCUMSTANCES
WHATSOEVER, REPRODUCE THESE MATERIALS, IN WHOLE OR IN PART, OR DISCLOSE ANY OF THE CONTENTS HEREOF TO ANY OTHER PERSON WITHOUT THE EXPRESS CONSENT OF THE GENERAL
PARTNER OF THE FUND AND (B) WILL RETURN THIS PRESENTATION, AND ANY OTHER MATERIALS THAT THE RECIPIENT MAY HAVE RECEIVED IN THE COURSE OF CONSIDERING AN INVESTMENT IN THE
FUND, TO THE GENERAL PARTNER OF THE FUND IF SO REQUESTED BY SAME OR IF THE RECIPIENT DOES NOT WISH TO PURSUE AN INVESTMENT IN THE FUND.
THE LIMITED PARTNERSHIP INTERESTS IN THE FUND WILL BE OFFERED ONLY TO INVESTORS WHO MEET CERTAIN QUALIFICATIONS. THE GENERAL PARTNER OF THE FUND RESERVES THE RIGHT TO
APPROVE EACH INVESTOR. AN INVESTMENT IN THE FUND WILL INVOLVE SIGNIFICANT RISKS DUE TO, AMONG OTHER THINGS, THE NATURE OF ITS INVESTMENTS. INVESTORS SHOULD HAVE THE
FINANCIAL ABILITY AND WILLINGNESS TO ACCEPT THE RISKS AND LACK OF LIQUIDITY INHERENT IN AN INVESTMENT IN THE FUND. INVESTORS MUST BE ABLE TO WITHSTAND A TOTAL LOSS OF THEIR
INVESTMENT. THERE WILL BE NO PUBLIC MARKET FOR THE LIMITED PARTNERSHIP INTERESTS IN THE FUND, AND SUCH INTERESTS, SUBJECT TO CERTAIN LIMITED EXCEPTIONS, WILL NOT BE
TRANSFERABLE. EXCEPT AS PERMITTED PURSUANT TO THE TERMS OF THE PARTNERSHIP AGREEMENT, INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF AN INVESTMENT IN THE FUND FOR AN INDEFINITE PERIOD OF TIME.
EXCEPT FOR THE GENERAL PARTNER AND CERTAIN OTHER IDENTIFIED REPRESENTATIVES OF THE FIRM, NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION RELATING TO THE FUND OR THE LIMITED PARTNERSHIP INTERESTS THEREIN. EACH PROSPECTIVE INVESTOR WILL BE AFFORDED THE REASONABLE OPPORTUNITY TO: (A)
OBTAIN ALL ADDITIONAL INFORMATION WHICH HE, SHE OR IT MAY REASONABLY REQUEST RELATING TO THE FUND OR THE OFFERING OF ITS LIMITED PARTNERSHIP INTERESTS; AND (B) ASK
QUESTIONS OF THE GENERAL PARTNER AND CERTAIN OTHER IDENTIFIED REPRESENTATIVES OF THE FIRM CONCERNING THE TERMS AND CONDITIONS OF THE PARTNERSHIP AGREEMENT, ANY
INFORMATION SET FORTH IN THIS PRESENTATION, AND ANY SUPPLEMENTAL INFORMATION THAT MAY BE PROVIDED TO PROSPECTIVE INVESTORS BY THE GENERAL PARTNER OR ITS AFFILIATES.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS PRESENTATION OR ANY PRIOR OR SUBSEQUENT COMMUNICATION FROM THE GENERAL PARTNER OF THE FUND OR ANY
OF ITS REPRESENTATIVES OR AFFILIATES, AS LEGAL, TAX, OR INVESTMENT ADVICE. EACH INVESTOR SHOULD CONSULT WITH AND RELY ON HIS, HER OR ITS OWN PERSONAL COUNSEL,
ACCOUNTANT, OR OTHER ADVISORS AS TO LEGAL, TAX, AND ECONOMIC IMPLICATIONS OF AN INVESTMENT IN THE FUND AND ITS SUITABILITY FOR SUCH INVESTORS.
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3. What We Are
A $40+ Million New Generation Seed
Fund
• One of the most visible and active SuperAngel seed funds
• Extremely strong mindshare among entrepreneurs and VCs
• Focused on Consumer & SMB Internet/Web Infrastructure
• Can write lots of small checks fast
• Manage a Startup Accelerator which houses dozens of companies
• Actively work with portfolio to raise additional capital
• Closed on $13+million to date
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4. Who We Are 500 Executive Team
Dave McClure is 500's fearless Chris/ne Tsai directs the 500 SuperMentor program, plaLorm
leader. Previously Dave managed partnerships, is part of the investment team. Previously,
early‐stage investments for ChrisDne was at Google and YouTube, most recently leading
Google I/O.
Founders Fund and ran
Enrique Allen directs the Accelerator and design iniDaDves while
Facebook's =Fund REV. Before
prototyping ways to make early stage invesDng more scienDfic.
that he ran developer markeDng Previously, he helped design Facebook's =Fund REV. Enrique hails
at PayPal and Simply Hired, and from Stanford's Persuasive Tech Lab where he developed apps to
has founded Silicon Valley change people's behavior.
community iniDaDves like
Startup2Startup, GeeksOnaPlane, Christen O'Brien is the Events Director at 500 Startups, where she
manages startup conferences, pirate parDes, and world tours, not
and StartupVisa. to menDon leading 500’s sponsorship strategy.
500 Mentors
•125 People globally (8 countries)
•Design, engineering & mktg experts
•Access to major technology
distribution platforms
•Take a look: http://bit.ly/hepCpz
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5. How We Decide
Volume Investing Requires Clear Selection
Criteria
• Simple Revenue Model (transactions, subscriptions
& lead generation)
• Alpha or Beta out (or previous product success)
• Technical Founder on Team
• Usage Validation (more than friends & family)
• Product Solves a Problem
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6. Startup 2.0 “Lean Investor” Model
Method: Start with lots of small experiments, provide resources to
accelerate time to market, filter out failures, increase investment in
winners through Seed and Venture rounds.
How We Invest:
• Accelerator/Incubator: $0-$100k
Build and Validate Product
• Seed: $100K-$1mn
Co-invest to Test & Grow Mktg Channels
• Venture: $1mn-$5mn
Maximize and Grow Revenue
Investment Objective: 5% stake on exit
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7. “This morning, Dave McClure's 500
Startups unveiled details of its accelerator
program, which has been quietly
underway for the last few months...”
Dave has built the
500 Startups brand
on the shoulders of “500 Startups trades office space,
mentoring and up to $100,000 in capital for
journalists too 5% of each new venture it backs.”
numerous to name.
But the true worth of
Dave McClure’s
personal brand can
only be measured in
the context of his
comparison set...

8. “This morning, Dave McClure's 500
“Angel Trivia Tests
Startups unveiled details of its accelerator
Your Knowledge of program, which has been quietly
Startup Investing” underway for the last few months...”
“500 Startups trades office space,
mentoring and up to $100,000 in capital for
5% of each new venture it backs.”

9. Early Stage Investing
“Micro VC”
Baseline Venture Firms
Felicis
Floodgate Accel
Super Angels Benchmark
Freestyle
Ron Conway SoftTech CRV
Keith Rabois SV Angel General Catalyst
Reid Hoffman Greylock
Naval Ravikant Sequoia
Paige Craig Spark
Accelerators
AngelPad
DreamIt
NYC Seed
TechStars
Y Combinator
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10. Evolution of Angel
m
Capital d ig
Demands ra
Pa
ld
O
Traditional Venture
Angel
0
Opportunity Area
2.
p
money Venture
tu
ar
2.0
St
Proof of Market Customer Company
Sales Ramp Acquisitions/
Concept Validation Acquisition/ Market Grab Progress
Distribution

11. SuperAngel Investment Model Makes Sense
Capital efficient business models favor first investors

12. Sequoia Capital
QuickStart Discovery Fund

13. Our Advantage
500 Mentor
35% Network
Angel List 10%
Superior
20%
Blogs,Webcasts
Social Deal
Media
Sourcing
Conferences: Other VCs 5%
- Startup Metrics
- Lean Startups
30% - AARRR Methodology
- Warm Gun
- SMASH Summit
- Inbox Love
- Geeks on a Plane
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14. Quantitative, High-
volume Investing
40
30% • 200 companies
(avg $75K/deal)
• Anticipate 80% failure
rate (160 co’s)
high quality
‘survivors’
$40mn
• Use insider advantages
70% • 5+% ownership target
to increase ownership in
most promising deals
• Lower failure rate
Double down
after traction
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15. How 500 Startups Can Deliver 3X
:77,2;<"!=501$"
•No heroic exit assumptions
&'()**)+,-! 40"62178$+&'"
•Feed winners via follow-on investment
#%"! •Protected by, “Law of large numbers”
.)/0'1234+3523-'
"6'+4'1+37+*)+'
#$$!
!/01$"23" ! $200mn average exit
! $4mn payback/co.
,&(.,$" ! Approx. 10 companies (5%)
! 3-5% Ownership
!"!
!401$"
500"62178$+&'" 8+*)9'1234+3523-' ! $25mn average exit
#"6'+4'1+37+*)+' ! $1.25mn payback/co.
High Performers
! Approx. 30 companies (15%)
!9/1$"23" ! 5% Ownership
Solid Performers ,&(.,$"
Poor Performers Poor Performers ! Assumes $2-5mn return
!"#$%&'(&)" !"*+'(,+-.(&)"

16. Accelerator: Mentors, Marketing and
Money
Funding - $25 - $100K checks on standardized terms
Distribution - inside track to distribution platforms like Facebook, Google, Twitter etc
Location - innovative & creative environment in downtown Mountain View 10k sq ft top floor with 360
view of entire Bay Area + walking distance to Caltrain/public transport & delicious-affordable food
Proximity - 15 min away from Facebook, Google, Microsoft, Apple, major VCs, Stanford University &
more
Designers in Residence - experts on site conduct 1:1 reviews and bootcamps
Mentors - 1:1 support + access to resident mentors & domain experts (eng/prod/mkt)
Education & Events - weekly talks, “office hours” for design, data & distributionstrategies, public
& private events, conferences, social gatherings and quarterly “Demo Day”
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17. Case Studies
•Twilio makes web-service APIs •Based out of Tokyo, offers web-
so developers can build their •Develops tools that enable powered human translation
organizations to engage services between English,
own scalable, reliable
millions of social network Japanese, Chinese, Spanish,
communications applications
users. Italian, French, German,
for voice and SMS.
•Thousands of businesses use •Technology allows Korean and Russian.
organizations to create •myGengo launched an API in
Twilio in diverse industries
attractive, branded interactive April 2010 which allows
such a healthcare, education,
campaigns and publish them websites to connect to the
customer service, retail, and
on multiple social networks myGengo service and order
manufacturing.
•Company recently closed on •Closed $4mn in a $16mn and receive human translations
Series A last spring. dynamically.
$12mn in a $40mn Series B
last fall. •In addition to 500, investors
include Summit Partners, Jeff •Company recently closed on
•Investors include Union Square Clavier, Aydin Senkut, Gary
Ventures and Bessemer $750k of angel seed funding
Venture Partners. Vaynerchuk. last fall.
•
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18. Investment History
Facebook fbFund FF Angel LLC 500 Hats LLC
22 incubator deals 21 seed deals 15 deals 2004-2008
($850K) Personal Investment &
($2M) Advisory roles
Results: 1 exit @ $170M (9x), +3-6 future wins
(~$300K)
2 addtl exits @ $50M, $70M (advisory roles)
Bix (acq YHOO)
Jambool
(acq GOOG)
Results: Results:
Results: rd $500K+
Results: Results:
6 raised Series A $2M+ 3 exits to date
8 raised seed 8 raised Series A B $5-10M+
3 raised Series $2M+ -Mint; $170M (9X)
8 raised seed rounds $500K+ 3 raised Series B $5-10M+
3 small exits 1 early exit @ 4X -Bix; Acquired by Yahoo, $50M
3 exits to date 1 exit to date (4X) -Jambool; Acquired by Google
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19. Target Investment Profile
Consumer & SMB Internet Svcs + Internet Infrastructure
E-Com, Financial, SMB, Search/Social/Mobile, Email, Analytics, Parent/Education
Distribution Platforms (for customer acquisition):
Search: Google (SEO/SEM)
Social: Facebook, Twitter
Mobile: Apple (iPhone, iPad), Android
Media: YouTube (video), Blogs (text), Photos, Music, Games
Inbox/SMB: Gmail/Docs, SalesForce, LinkedIn
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20. 500 Portfolio
At A Glance Series B
funded
Upcoming
Series A Series B
funded
Upcoming
Series A
Accelerator
Seed
elacarteonline.com

21. Investors
Individuals Venture Firms
Marc Andreesen (Netscape/ Accel Partners
Opsware) Blue Run Ventures
Michael Birch (Bebo) The Founders Fund
Brad Feld (Foundry Group)
Mark Goines (ex-Intuit) Redpoint Ventures
Mitch Kapor (Lotus)
Josh Kopelman (First Round)
Gus Tai (Trinity Ventures)
Fred Wilson (Union Square)
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22. Fundraising
2010: $13M+ from Silicon Valley VCs & Individuals
• $1-2M from 5 VC funds
• $100K-$500K from ~30 VCs, execs, entrepreneurs
2011: $27M+ from Family Office, Institutional,
Venture Firms and Corporate Strategic Investors
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23. Why 500 Startups?
Why Now?
• Unparalleled ability to source the best seed deals.
• One of the few seed funds that also operates an
accelerator.
• Two pronged strategy offers diversification, using
quantitative, high volume investment approach, and
reduces risk on “big bets” from insider methodology
for doubling down on the most promising deals.
• Professional infrastructure and team skill set for
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24. Fund Terms
• Fund size target of $40mn
• Mgmt Fee: 2% over term (3% drops .5% every 2 yrs)
• Profits: Initially, 80/20, adjusting to 75/25 or 70/30 if
performance milestones are met
• Investment Period: 2 years
• Term : 10 years
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25. Backup

26. Enterprise/
The Portfolio
Productivity
Communications Mobile/LBS Education To Be Announced
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27. The Portfolio
Analytics
Consumer/ Financial Marketing Retail/Ecom
Entertainment Services
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28. Dave McClure
2000-2010
Investor: 100+ Startups (Mint, SlideShare, Twilio, WildFire)
Blogger: Ranked #7, Top VC blogs (TechCrunch, Jan 2010)
Marketing: PayPal, Mint, Founders Fund
Community: Startup2Startup, GeeksOnaPlane, StartupVisa
Teacher: Startup Metrics, Stanford Facebook class
1980‘s & 90‘s
Entrepreneur: Founder/CEO Aslan Computing (acq.)
Developer: Windows App Dev / SQL DB Admin
Engineer: Johns Hopkins ‘88, BS Eng / Applied Math
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29. Startup Investor Ecosystem
Tech Stars
Y-Combinator
$0-$10M
Angels & Incubators
$10-$100M Felicis (Senkut)
SoftTech (Clavier) Seed Funds
First Round Capital $100-$250M Union Square Ventures
Venture Funds
Menlo Ventures >$250 Accel Partners
Large Venture Funds
KPCB
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