How to get into 500 Startups, by a Canadian founder (and why you still want to)
I often get approached by founders asking about our 500 experience and how they can get an opportunity to join a top tier accelerator. In light of recent news about Dave McClure, I thought this was a better time than ever to share a bit of our experience and try and help other founders leverage this experience. 500 Startups is more than one person, it’s a network of more than 1700 companies and 150+ professionals on staff working around the world. I definitely don’t think it’s defined by one event.
In fact, not only was 500 Startups one of the most incredible opportunities our company has ever experienced, it was quite possibly the most personal growth I’ve ever experienced.
Some highlights for me included:
- Marketing hell week! A week dedicated to growth marketing. This is the product of years of iterating on quality programming that doesn’t just leverage theory but provides much tactical take-aways. And yes, it’s hell, but oh so worth it.
- Fireside chats. God I love fireside chats. So much value from entrepreneurial war stories in their rawest form. Met people like Scott Farquhar (founder of Atlassian), Andrew Chen (growth at Uber) and Jason Lemkin (founder of SaaStr).
- #500Fam. The people you meet is by far the greatest advantage the 500 experience has to offer. I commend the amazing community and culture the 500 team has been able to foster.
- Demo Day. It’s probably not what you expect it to be, but if you want an excuse to be in the best pitch shape of your life, this is it. It was also a blast!
- Silicon Valley. For those reading this that are Canadian or international founders, just being in the Valley opens up your possibilities to a level you can’t yet understand.
So you want to get in now, eh? I’ll tell you how in 5 steps:
1. Build shit people love
I registered my first company when I was 15 and I could argue I tinkered with entrepreneurship all through my childhood, but let’s assume I only have 10 years of solid data—it’s not a lot, but it’s not nothing. By far, the most prominent rule that I have come across to build a successful business, specifically a highly-scalable startup, is to build something people love. If you’ve spent any time at all in the startup ecosystem you’ve probably heard this preached. I believe it is the only thing you really need when starting a company—everything else (for the most part) can come together. So as it pertains to getting into a top tier accelerator like 500 Startups, this is a great starting point. To be a little more tactical, what social proof (traction) can you show that you’ve achieved this?
Pro tip: 500 Startups loves leveraging OMTM (one metric that matters), so begin thinking about what that might be for your startup. Try to avoid vanity metrics—these people are smart and will see through your bullshit.
2. KISS the application
To get into 500 Startups or any major accelerator there is typically an application. I’ve had founders tell me they are shocked at how light these applications are. This is because they want to see how well you can articulate your business with limited real estate—a really good skill to acquire as an entrepreneur.
Pro tip: 500 Startups loves the concept: K.I.S.S. Keep it simple stupid (my dad likes this one too).
So, make sure you have a clear value proposition, can articulate the pain of your users and can show a good trajectory of traction. One thing to ask yourself (because they will likely ask it) is “how are we going to take this company to 100M annually?”. Try and paint that picture.
The application is typically built into AngelList so take advantage of the real estate and have decent product photos. Make sure that the founders profiles are relevant and up to date. They also require a founder video in the application. Do not add any post production. They don’t give a shit if you know how to edit videos, they want to get a first impression of the founders (founding team only is ideal) talking about your business. This is not a marketing video, and quite possibly one of the most important first steps in the process of getting an interview.
Boom. Click submit.
3. It’s all about the relationships
So you’ve recorded the founders video and submitted the application. Now it’s time to sit around and hope you get a response, right? Wrong. I’ve been learning this the hard way, but even when it seems like it’s not, relationships are the key to success in business. This is no different. Believe it or not, there are real people behind the scenes reviewing your applications. The key here is to try and form relationships with them. Do this well in advance if possible, not last minute. When it comes to Canadians specifically, you have a brand new advantage: 500 Canada. If you live in the greater Toronto area, the 500 Canada team is very active in the ecosystem—I suggest finding them at a local event and strike up a conversation, or request an intro to a partner through your network and ask them if they’d be open to learning more about what you’re building. Believe it or not they want to hear from you as much as you want to speak with them! Cross reference your LinkedIn with the 500 Canada team list here and request an intro if you have trouble finding them elsewhere.
Let’s assume you’ve successfully found a partner that is willing to chat with you. The goal remains the same as the application—it’s your job to convince them that you’re the right team to execute upon the vision you’ve laid out for them and can articulate that the traction to date is a signaling factor to that future success. Again, for Canadians, I actually think we have an advantage. If you’re able to speak to a Canadian partner, they have the ability to endorse your application directly to the US partners who inevitably control the accelerator program and make the final decision on your application. This endorsement goes a long way. I believe, currently, the barrier to get in front of a Canadian partner is much lower than their US counterparts, therefore you might have a better likelihood of getting that endorsement. 500 also spends a lot of time making sure they’re uncovering hidden gems in foreign ecosystems, so rest assured each batch has not only Canadian companies, but companies from around the world. My batch (B20) was 1/3 international including companies (just to name a few) from Africa, Estonia, Europe and of course Canada. Anyways, use this to your advantage.
Lastly, it’s important to connect with 500 alumni. Again, you want depth here, not breadth. Aside from the fact that these people will have more insight about the program, application and partners (like the information I’m giving you), the north star is their referral when you get past the application stage. Find alumni early on and really start to build a rapport with them to the point where they trust you as a founder and can get behind what you are building.
Pro tip: The more the better, but you really only need one solid referral—so if time isn’t on your side, really try and have this person trust that you can execute.
Remember, we get the position you’re in (we’ve been there), but we’re reluctant to refer anyone that we can’t trust and haven’t built a relationship with. After-all, it’s our reputation on the line.
4. Fail. Try again.
There’s a better than not chance you don’t get in the first time round. That’s okay! In fact, in some ways it can be helpful to show progress along the way and show them that you’ve actually done some of the things you said you’d do. We didn’t get in until our third time applying! Like us, you might also have an EIR or venture partner see your application, then book some time with you to get their foot in the the door so they can watch you over the next cohort or two. These are all good things! Again, the key is to prove execution—so use all of these as leverage points.
5. Nail the interview
You’ve got an interview. Congrats! This is definitely the most important part. If you’re actually engaged with this article then you’ll remember when I said the application is really short—yeah, so you really need to make a good impression when you meet the partners for an interview!
If you’re in the valley, the interview will be in-person. If you’re international, they don’t make you fly down to San Francisco—the interview will be on Skype. The typical format is 4–5 500 staff/partners on a 10 minute interview and then they swap for another 10 minute interview with about 4–5 more people. It’s fairly unstructured, so sell sell sell! The interview is really up to you at this point to make a good impression. We’re assuming here that you have a good idea, you have decent traction, and you have a well rounded team. The key is you must articulate this properly.
Sound like a lot of work? It is. Nothing good is going to come easy.
Bottom-line is, nothing can beat a solid product with exciting traction and a team that looks like they can execute upon what they’re saying. Do that, or you might as well ignore everything else.
Last minute factoids:
- You can be early and get into 500 Startups, but they typically invest in growth stage companies (between 25–50k MRR). They do this because they can provide the most value at this stage. Think about this before applying too early.
- It helps to be a second time founder. I realize this is uncontrollable, but it’s just a fact.
- Have a strong team, but this doesn’t mean a big team. I know plenty of 500 teams with 1 & 2 man teams that have gone through the accelerator program.
- Current verticals that are cold: marketplaces & social.
- Current verticals that are hot: AI/data, fin-tech & enterprise/b2b SaaS.
Thank you to Neha Khera and Carolyn Chong for reading early revisions of this.
Note: As of July 31, 2017 500 Startups decided to suspend the Canadian fund based on a disagreement between the LPs and Dave McClure’s involvement with the fund. Therefore some of my advice about talking to the Canadian venture partners isn’t as relevant. You can read about it on TechCrunch here.