Dave McClure's journey as an institutional investor began during one of the worst times in the financial history of the US. While he had been investing with his own funds as an Angel for a long time, but breaking into the VC world was decidedly more difficult.
When asked why he founded his current startup fund and incubator, 500 Startups, McClure responds in jest.
"Probably because I couldn't get a job working for any other VC in the Valley, I had to start my own," he said.
In the early 1990s, roughly between 1992-1995, McClure worked as a technology consultant with clients such as Microsoft and Intel. During that time he founded his first company, Aslan Computing, which was acquired by Servinet (now Panurgy) in 1998.
In 2001, he went to work for PayPal as their director of marketing, making him one of the original members of the PayPal Mafia. He stayed on at PayPal until 2004, later joining the job search startup SimplyHired in 2005. After leaving SimplyHired in 2006 he struck out on his own again as a consultant and began trying to raise a fund to invest in new companies.
McLure initially turned down an opportunity from Sean Parker to work at Founders Fund, in hopes he could raise his own fund. After the financial crisis made that exceedingly unlikely, McClure decided to take Parker up on his offer and joined Founders Fund in 2008. At Founders Fund, McClure made investments out of the fbFund and the FF Angel fund.
After he left Founders Fund in 2010, he founded 500 Startups. According to McClure, his breadth of experience helped him in the, often difficult, early days at 500 Startups.
"My experience on the entrepreneur and employee side as an engineer and as a marketer contributed [to my success]," he said. "That has given me, at least, a somewhat balanced perspective between making things and selling things.
"As an investor, making a lot of investments and seeing some modest percentage of them succeed gives me hope as well as humility," he said. "You're not right all the time, in fact, you're lucky if you're right even one out of three times."
McClure's non-linear career trajectory made him comfortable with the the idea that productivity can come in bursts and sometimes you don't see a traditional work pattern produce results; and, that's what happened with 500 Startups. McClure had to be patient and commit to the idea for it to work.
"Josh Kopelman once accused me of being the only person he knew who bootstrapped a VC fund," he said.
When it comes to the state of Silicon Valley and startups, he said he sees a pace that's aggressive, but not too aggressive. McClure is convinced that there is a much larger audience for entrepreneurship than people realize, and he believes that sometimes some VC firms are too structured to notice a potential investment.
"I think being comfortable with being uncomfortable is the expression I would use," McClure said. "Part of what we try to instill in our team is to run as fast as you can without having perfect information."
That' something that McClure said he tries to do everyday, be comfortable with being uncomfortable. Because, when it comes to working with startups, comfort will probably be in short supply.
In his own words...
What's the best thing you've read lately?
"There's probably three books that I reference as changing my thinking over the years. They aren't necessarily recent, though. Guns, Germs, and Steel is one. That's a Jared Diamond book from maybe 20 years back. Another one called The Mystery of Capital. It talks about capital formation and why certain geographies have worked better than others.
"More recently there's a book called Spent, which I think the subtext is sex, consumer behavior, and behavioral marketing, by Geoffrey Miller. It's a book that I recommend to entrepreneurs that doesn't really have much to do with entrepreneurship. It's really more about how behavioral psychology have been trying to understand how we think about marketing and other things."
What's your guilty pleasure?
"I'm a huge fan of sports, comedy, and cartoons. So, my guilty pleasure are The Daily Show, ESPN, and Adventure Time on Cartoon Network."
What is your main hobby outside of work?
"I really love the work that I do and I love hanging out with geeks and entrepreneurs; and that's probably where I would spend my time even if I wasn't investing in them."
Conner Forrest has nothing to disclose. He doesn't hold investments in the technology companies he covers.
Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.