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Introducing our 500 Startups Fund

At MicroVentures one of our goals is to provide investors with the ability to diversify their investments in early stage startups. Typically this means investing $5-10k in several startups, building a custom portfolio unique to that individual investor. While investors prefer this level of customization, others are hesitant since a well-diversified startup portfolio takes time to create and can range in cost from $50k-$250k.

Today, we are launching a new Fund that will allow investors greater diversification at a fraction of the effort and cost. This Fund will invest indirectly in over 300 startups through the 500 Startups program, an early seed stage Venture Fund. To do this, MicroVentures is creating a Fund that will be investing in three 500 Startups’ funds that they are actively raising capital for. These funds are:

500 Startups Fund III

This is the main investing fund for 500 Startups. 50% of the investments will be made into companies that are participating in their accelerator program. The other 50% will be early stage startups that falls into their investment criteria (defined below).

500 Startups Annex Fund I

The Annex fund will make investments in the strongest companies from 500 Startups Fund I that are performing and seeking additional capital. These investments will range from $50,000 to $500,000 range.

500 Startups Luchedores Fund

This fund will be investing in companies operating in Latin America. 90% of the investments will be though the 500 Startups accelerator program there.

500 Startups Investment Thesis

While not every investment falls within the investment criteria set forth by the 500 Startups investment team, the general investment criteria includes:

  • Product for service designed to solve a problem for a specific target customer
  • Capital-efficient business; operational with less than $1 million in external financing
  • Scalable internet-based distribution
  • Simple revenue model: transactions, subscriptions, affiliates
  • Functional prototype or previous product success prior to investing
  • Measurable traction: engaged users, some revenue and attractive unit economics
  • Cross-functional team with design, engineering, and marketing expertise

If you are an accredited investor you can participate in this Fund with a minimum investment of $10,000. If you were to invest in each of these funds individually you would have to invest over $400,000. MicroVentures’ 500 Startups Fund gives you the ability to diversify and spread the risk in the earliest stage of a startups life.