Silicon Valley VC Culture: ‘We assume a very high failure rate – about 80%’

Dave McClure, of 500 Startups, one of Silicon Valley’s Top Seed Investors, continues: ‘We expect a few exits in 3-7 years, but we place lots of little bets. We filter out the failures and small wins and double-down on stuff that looks like it’s working… I want to invest in a functional product that people are using. We look for functional prototypes and customer development and most importantly, scalability. Can you scale customer acquisition cheaply and measurably? … Don’t write business plans; instead build prototypes & test them with customers… Don’t create five-year revenue projections; create 12-month expense projections…Don’t run out of cash. Check your monthly burn rate, cash in the bank; figure out your remaining runway and try not to get below six months of cash’.

‘Don’t Write Business Plans‘: Advice For Startups … by Amy Guttman. Forbes 7/21/2015