The 500 Startups Index – 369 Companies and Counting

YC has invested in 2 companies that went thru 500 accelerator first (9GAG and Vayable), and also a few others where we invested at around the same time as YC (Scoutzie, Virool, Microryza, Referly).

also, we are investors in ~20 TechStars companies (including Sendgrid), and also ~10 companies each from AngelPad in SF, and SeedCamp in Europe, and StartMate in Australia.

altho we run our own accelerator program at 500, we are frequent investors in other accelerator programs, including several around the world in East Asia, South Asia, Latin America, Western & Eastern Europe, and the Middle East.

btw, our initial investment at accelerator or seed is more like $50-100k, and follow-on investments at Series A/B are between $100-500k. in about 10 companies we hold aggregate basis positions of between $500K-$1.5M.

500 Startups Fund I has ~256 companies, and currently Fund II has ~220 companies (and will likely be around 275 total). out of each of these funds, we aim for perhaps 50+ companies to get to Series A/B rounds led by institutional investors (in which we will also continue investing as well), and from these perhaps 10-20 may achieve larger exits of $100M or more.

as to performance & exit model expectations, our rough model expects that 5-10% of portfolio (~10-25 companies) will do 20x or better, and perhaps 10-25% (25-60 companies) do 3-5X. at a median initial entry valuation of ~$4M, 20x would be an exit of $80M, and 3-5x would be an exit of $12-20M.

so far, 500 Startups Fund I has had about 10 exits in the $5-30M range, and 1 exit at $350M (Wildfire). still private and growing are 5-6 companies that are valued around or above $100M (Twilio, Sendgrid, Taskrabbit, Makerbot, Viki, Smule). we also have about 25-30 companies valued at between $25-$75M that look promising. with luck, hopefully some of these companies will find exits at or above current valuations (tho likely not all of them).

also different from the earlier SV Angel portfolios, 500 Startups doubles down (& triples down) selectively on our top 20-30% of portfolio companies in later rounds. we believe this enables us to weight our portfolio more towards winners, rather than a pure scattershot index strategy.

in any case, it will take a few more years to see if our strategy works, but so far it looks like it's not completely irrational.

(ps - altho they are usually higher valuation, about 10% of our portfolio is YC companies. since median valuation at YC demo day is more like $7-8M, you might have to double the target exits noted above... however we also have many of our own accelerator companies where our entry valuation is more like $1-2M to offset)