Seed Capital From Angel Investors: Dave McClure, Founder, 500 Startups (Part 5)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you hold any events for entrepreneurs?

Dave: Actually, I put on a decent-sized 300- to 500-person conference on a quarterly basis. I also run a lot of user groups and events, meetings, and dinners.

We’re running one called Warm Gun, a conference about design and measurable designs, for both engineers and designers.

Earlier this year we ran a conference called SMASH Summit that was about online distribution platforms, primarily Facebook, Twitter, and YouTube but also a bunch of other online marketing tools.

And then I’ve done different conferences that Eric Ries has run called Lean Startup; those are about customer development and conversion metrics. >>>

Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund (Part 3)

By guest authors Irina Patterson and Candice Arnold

Lewis: Going forward, our model is that we will continue to have students.

We are a student program and will be for as long as we’re around. We do that same type of project work but typically we will end up working more with the investment funds and foundations and high net worth individuals who are making investments in the impact investment space.

We provide our services on a pro bono basis with the understanding and agreement that if that organization ends up funding and investment and we like that investment, we will have the ability to co-invest alongside that organization.

That model, again, is the same model that the University Venture Fund uses,  our sister fund – if you will – has proven to be a very successful and unique model in that it is real time investing.

There are LP’s in the fund looking for market rate returns. The great thing about the model is that because there is value add work that we do, we are able to invest alongside some of the top funds and names in the space. >>>

Seed Capital From Angel Investors: Dave McClure, Founder, 500 Startups (Part 4)

By guest authors Irina Patterson and Candice Arnold

Dave: We are a little bit different from many other programs where the advisors are primarily coming from the investor category. In our world, those are mostly coming from the operational field category. Most of our mentors are coming from engineering, marketing, or design backgrounds, maybe product or business backgrounds, not so much investors. We have a few angel investors and VCs who are mentors, but they’re more the exception than the rule.

In many cases, our mentors are founders of companies we’ve already invested in or successful entrepreneurs whom we’ve gotten to know. I think we are going to be looking at the different companies we invest in and what kind of backgrounds and industry verticals they’re looking at, what kind of skill sets are they interested in hiring for or acquiring , and try to match people up that way. >>>

Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: How many employees do you have?

Lewis: We have one principal; his name is Patrick Mullen. The beauty of our model is that the rest of our employees are actually university students whom we bring into our program.

So, our system and structure is very similar to what you’d see at an existing venture firm in that we bring you on as an analyst or intern – using the words interchangeably – and we put you through a boot camp series of trainings and really drive home our model. >>>

Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the thirty-first interview in our series on financing for entrepreneurs. I am talking to Lewis Hower, executive director of University Impact Fund, which bills itself as the first student-run social impact seed financing organization for entrepreneurs that intends to deliver a return to its investors.

Based in Salt Lake City, the fund plans to use local students to source and analyze deals that address socioeconomic issues, such as clean water, waste management, and alternative energy. The fund size is planned to be at about $10 million to $15 million when fundraising is completed. >>>

Seed Capital From Angel Investors: Dave McClure, Founder, 500 Startups (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: How many investments have you made?

Dave: It’s a little hard to keep track at times, those deals are things that I’ve been working on since the beginning of the year, probably 43, maybe 44 in calendar year 2010. Although the fund’s only been operating for two months, that’s basically the past nine months’ worth of activity.

Again, our target on an annual basis is probably around 75 to 100 once we’re up to speed, at about $100,000 sized average investment, anywhere from $50,000 to $250,000. >>>

Seed Capital From Angel Investors: Dave McClure, Founder, 500 Startups (Part 2)

By guest authors Irina Patterson and Candice Arnold

Dave: I was fortunate to have folks like Reid Hoffman and other folks as mentors or guides. They gave me a few tips. I ended up doing some consulting for  and also becoming an investor in Mint. That was one of the more notable investments that I’ve done.

Mint was acquired by Intuit last year for about $170 million. That ended up being about a 10x return on investment. And I got more into doing angel investing and less doing the consulting side. I sort of switched from charging for my time as a consultant and became more of an investor and advisor for the company, writing them checks. >>>

Seed Capital From Angel Investors: Ira Weiss, Hyde Park Angels (Part 8)

By guest authors Irina Patterson and Candice Arnold

Irina: Do any of the companies you mentioned have any interesting stories?

Ira: The one that we’re hoping is going to be the most successful is a company called Avid, which hasn’t gone liquid, yet, so there’s not a lot of information out about it.

What’s interesting about Avid is what they do. Their product is called Avid Radiopharmaceuticals, and that company has a diagnostic for Alzheimer’s disease. Thus far it’s been very, very successful. The New York Times has written a lot of articles on the company. >>>