Should 500Startups make investments in similar startups?
There is a growing brouhaha about 500Startups making investments in companies that have similar/identical products. This is causing some portfolio companies angst. Question: is this a good thing, bad thing, for whom?
3 Answers
Views • Upvoted by Jonathan Brill, Startup sales junkie. 9 acquisitions and counting. and Parker Thompson
Most Viewed Writer in 500 Startups with 90+ answers
Should we? Probably not direct competitors, at least not at the same region of focus / at the same time. note that we do invest in many companies, with perhaps similar customer segmentation & focus. however we generally don't sit on boards, and we do our best not to share any sensitive or confidential info that might harm our companies. For most companies in our portfolio, this is understood and accepted. The benefits seem to outweigh the negatives.
Do we? Well, the reality is that we do make investments in similar startups -- in kids & education, in email communication, in event ticketing, and probably in several other areas. it's happened at least 5x or more that I'm aware of. Again not usually intentional, but it probably will happen from time to time.
Will we in future? Well, as noted above it's likely. because we invest in so many companies, & because of our investment themes & focus areas, it's difficult to avoid. That said, we do try to avoid investments in companies that compete directly head-to-head in the same region at the same time.
Overall, we try and help all of our companies. And we think a larger community of startups & founders who share similar customers & industry verticals is better for all involved. But if you don't agree with this philosophy, then you should probably reconsider whether to take money from us.
In summary: Yes, it does & will happen. Such is life. Hopefully you won't think we're assholes, but even if you do, hope we can help make your life better not worse.
- DMC
Do we? Well, the reality is that we do make investments in similar startups -- in kids & education, in email communication, in event ticketing, and probably in several other areas. it's happened at least 5x or more that I'm aware of. Again not usually intentional, but it probably will happen from time to time.
Will we in future? Well, as noted above it's likely. because we invest in so many companies, & because of our investment themes & focus areas, it's difficult to avoid. That said, we do try to avoid investments in companies that compete directly head-to-head in the same region at the same time.
Overall, we try and help all of our companies. And we think a larger community of startups & founders who share similar customers & industry verticals is better for all involved. But if you don't agree with this philosophy, then you should probably reconsider whether to take money from us.
In summary: Yes, it does & will happen. Such is life. Hopefully you won't think we're assholes, but even if you do, hope we can help make your life better not worse.
- DMC
Views • Upvoted by Dave McClure and Terrence Yang
Most Viewed Writer in Startup Incubators and Accelerator Programs with 30+ answers
Should Harvard admit two graduate students who study a similar topic? To quote Joan Rivers, grow up. It's not your idea that counts, it's you.
I think this is interesting as an entrepreneur. There are so many new and interesting companies being started, each with their own approach, ideas and execution. The startup dynamic is such that one bad move, one wrong hire, one missed opportunity can end a company before it gets a real chance to succeed. If the investment game is to pick winners and fuel innovation, it is both bad business and unwise to only pick one horse, given how hard the race is to run.
