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Exclusive: 500 Startups raises second fund

September 6, 2013: 11:31 AM ET

One of Silicon Valley's most prolific startup investors raises new money.

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FORTUNE -- 500 Startups, the seed-stage VC firm and incubator led by Dave McClure, has closed its second fund with $44.1 million in capital commitments, Fortune has learned.

That's a bit short of the firm's $50 million target, but a significant bump over the $29.6 million raised for its debut fund in 2011. The increase means that 500 Startups can now invest a bit more in follow-on rounds, although initial investment sizes are expected to still max out at $250,000. Around 75% of the capital is earmarked for U.S. tech investments -- with a particular focus on Silicon Valley -- while the rest will be invested globally (500 Startups also has some smaller regional fund efforts, including one in Mexico).

To date, 500 Startups has made over 500 investments across 35 different countries, including deals for TaskRabbit, SendGrid, Twilio and Wildfire. That high volume strategy -- which some others VCs deride as "spray and pray" -- means that Fund II already is significantly committed. Chances are that there will be a much shorter lag between Funds II and III than there was between Funds I and II.

McClure declined to comment on anything related to fundraising, except to say that 500 Startups has "learned a hell of a lot" since its initial launch.

In addition to McClure, full-time 500 Startups partners include Christine Tsai, Christen O'Brien and George Kellerman. There also are nine venture partners and a slew of outside advisors.

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Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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