David Mcclure on venture capital performance
From Dave McClure in Moscow: VC Evolution (Geeks Got Next) · · DigitalOctober
“Venture capital generally sucks like historically has sucked balls across the board. Three out of four venture capitalists, sorry, two out of four venture capitalists lose money completely. Maybe another one out of four make some money but don't beat the risk-adjusted returns of other much more liquid security asset classes. And probably not even one out of four actually make money and beat the averages.”
On , David Mcclure, Founder of 500 Startups at 500 Startups, spoke about venture capital performance during Dave McClure in Moscow: VC Evolution (Geeks Got Next) on DigitalOctober.
About David Mcclure
Dave McClure, founder of 500 Startups, has been active in discussions about venture capital strategy, secondary markets, and the global startup ecosystem. In recent appearances, he described his firm's historical investment approach, noting that of the roughly 2,000 companies in his first four funds, about 2% produced outsized returns, with one out of every 500 companies generating returns of 500x to 2,000x. He stated that 50-70% of investments fail or return less than 1x, while about 20% return 2-5x. McClure has also discussed his shift toward venture fund secondaries through his firm Practical Venture Capital, saying he saw an opportunity to provide liquidity for LPs and GPs of early-stage funds, particularly for smaller fund-level positions under $5 million. He described the secondary market as a way to "skip the J-curve" by buying into funds around year seven. McClure has commented on broader industry trends, including the growth of stablecoins, AI infrastructure investments, and regional startup ecosystems. He noted that Tether has over 500 million users, primarily outside the US, and described stablecoins as a tool for financial inclusion in regions like Latin America and Africa. On AI, he discussed Google's $3 billion partnership with Anthropic and the rise of regional AI companies like Japan's Sakana AI. McClure also spoke about the importance of community building and real estate in startup ecosystems, and expressed interest in charter cities and special economic zones as venues for experimentation. He has been critical of venture capital practices, stating that "VCs lie" about their marks and that secondary buyers must discount illiquid assets accordingly.