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Denver Startup Week Q&A: Dave McClure of 500 Startups

Confluence talks with Dave McClure of 500 Startups before his kickoff speech for the third edition of Denver Startup Week. He gives his thoughts on Colorado's startup culture, the impact of Denver Startup Week and hype versus reality.
In startup circles, you hear a lot about angels, of the investor variety, primarily; the individuals who provide capital for businesses to go from dream to reality, often in exchange for convertible debt or ownership equity. But as the conversation swirls around availability and access to capital for our homegrown infant enterprises, you don't hear much about super angels. 

Enter Dave McClure.

The tech-centric, serial investor will descend on Denver from his San Francisco home base as the keynote speaker for the third iteration of Denver Startup Week.

"He's probably one of the most prolific angel investors of our time," says Erik Mitisek, Colorado Technology Association CEO and Co-Chair of Denver Startup Week  (DSW). "He has perspective on global startup communities and how they're changing."

McClure, super angel and founder of the 500 Startups seed fund and accelerator, is likely to have a captive audience Monday morning Sept. 15 to headline the DSW kickoff breakfast. The 750-person event sold out in four hours.

For year three, DSW, the "largest free entrepreneurial event in North America," runs from Sept. 15-20, with 140 speakers, panels, workshops, career fairs and socials to fill the five-day celebration.

Before the madness ensues, we asked McClure about how Denver fares in the global pursuit of top startup honors and what it would take for him to consider a Denver-based business to be worthy of a super angel. 

How is Denver's business landscape perceived from your vantage point?  Are our businesses and communities cut out to compete in the harsh national and international playing fields?

Certainly the Denver metro and Boulder startups scene are notable business communities that can generate and attract talent. In particular, Boulder has done a great job building a strong startup community. 

That said, Colorado has a challenging job competing for attention with larger metros like New York and Los Angeles, and with the Silicon Valley tech mecca. It will have to be smart about where it focuses resources and branding to create an advantage in specific industry verticals, technology categories and customer segments.

What would you say Denver has that's working to support startups and what does it still need to succeed in building a lasting startup-friendly infrastructure? In other words, why build a business here and now versus going elsewhere? 

Colorado's advantages are likely in categories that emphasize sports and environment, healthy lifestyle, alternative energy, and other forward-looking clean and green areas. It also has a strong base of college talent with the local universities and with the tech communities in Boulder and Denver...probably also industry experience in communications infrastructure as well.

What difference does Denver Startup Week make in the grand scheme of things?

In the short term, these events provide visibility and marketing for the Colorado tech community. In the long term, they can provide a platform for connections to investors and experienced entrepreneurs and mentors.

What is the number-one thing you look for in a startup? How does a company cross the threshold between intriguing concept and a business worth investing in?

We focus on product experience and on customer usage metrics and revenue, and growth metrics that indicate positive trends. Positive/profitable unit economics are also a great signal. And of course a talented team that can execute matters a lot. But mostly we look for a small team with a useful product that is just starting to scale customers -- that's when we like to jump in.

What would it take for you to fund a Colorado-based business?

We have actually invested in several businesses out of Colorado, and are a frequent investor in TechStars Boulder companies (including SendGrid). [It] doesn't take much beyond the items identified above. 

Why all the hype around startups now? Is it a fad or it is a part of a larger shift?

There [are] a lot of trendy and faddish behaviors, by both geeks and mainstream audience, but there's no question technology and tech-related products and services are all around us, and part of almost every human being's daily existence. It's hard not to see tech as a growing and fundamental part of the human experience.

What's your top pitch tip for DSW audience?

If you got traction, show me the traction. If you don't got traction, then tell me a damn good story about your customer and their problem, and how you can solve it.

Read more articles by Gigi Sukin.

Gigi Sukin is a Denver-based writer-editor. She currently works as an editor at ColoradoBiz and previously worked as an editorial intern at 5280.
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