Investing in 250+ SaaS Startups with Marvin Liao, Partner @ 500 Startups - Escape Velocity Show #43

About this video

Escape Velocity interview with Marvin Liao, a partner at 500 Startups who says he had been there nearly six years after 10.5 years at Yahoo in five roles. He says 500 had invested in 2,300 companies with 14 unicorns, and Fund One returns were easily over 20% IRR. The title’s ‘250+ SaaS Startups’ figure is not confirmed in the transcript; Marvin instead says 80-90% of his own best performers have been SaaS and mostly immigrant or foreign founders. Notable portfolio names he cites include Talkdesk, Aircall and ManyChat, where he says he was first investor in 2016 when they had no revenue, while Aircall had about $20,000-$30,000 MRR. The thesis remains many small bets and following winners, with diverse, coherent teams - business, technical and design/UX - mattering more than traction alone. He explains 500 avoids follow-on in the first seed round after the accelerator to avoid signalling harm to other companies, while retaining pro-rata rights. The four-month San Francisco accelerator runs two cohorts a year of 30-35 companies, focusing first on community then on metrics and growth, though he grades post-batch support only C/C+. He urges an executive coach after Series A/B, describes investing as a service and human-potential business where he helps mainly on growth/customer acquisition and fundraising - noting many SaaS companies should bootstrap - and says the best pitch route is a warm introduction from a founder or investor who will vouch for you.

Key takeaways

• At early stage Marvin invests primarily in teams: functional diversity across business, technical and design/UX, and a coherent shared vision, matters more than a set traction threshold.
• 500 Startups’ model described here is many small bets across 2,300 companies, following winners later while deliberately not following on in the initial post-accelerator seed round to avoid negative signalling.
• Traction expectations vary widely: ManyChat was backed with no revenue on founder insight, while Aircall entered with roughly $20,000-$30,000 in MRR and a strong team.
• Founders raising a Series A or B should get a very good executive coach or they are, in Marvin’s words, at a massive disadvantage; all his best companies have coaches.
• Investors want to be introduced, not cold-pitched: get a portfolio founder or trusted investor to vouch for you, and if cold emailing, do your homework and be highly thoughtful.

Episode details: published December 17, 2020 · 37:32 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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