At #Startupfest in Montreal, the founder of 500 Startups, an early investor in now publicly traded Twilio, said less than 10% of the VC firm’s investments will have a “meaningful economic return.”

The sobering words from Dave McClure, a respected voice among VCs, helped bring perspective to Startupfest attendees on the challenges facing startups aiming for Twilio-like success.

Less than 10% of @500startups investments will have a meaningful economic return, says @davemcclure at #Startupfest pic.twitter.com/1aL0oYSUSe

— TechPORTFOLIO (@TechPORTFOLIO) July 14, 2016

Still, McClure’s comments about Twilio, a cloud communications platform used by Uber and many other widely used apps, was one of the most popular tweets from yesterday’s sessions in Montreal. 500 Startups invested in Twilio’s series B funding, along with Bessemer Venture Partners, in 2010, according to Crunchbase.

The cloud communications platform debuted on the New York Stock exchange last month, and saw the value of its shares jump 92% above its IPO prospectus price of $15 per share.

McClure is modest about the success.

VCs should never take credit for their companies’ success, @davemcclure says about recent exit @Twilio #Startupfest pic.twitter.com/hRtZCM1uYd

— IBM Cloud Canada (@IBMCloudCA) July 14, 2016

So how do you get McClure or 500 Startups’ attention? A functional product, early customer usage, and a good team, said McClure.

“Show me objective, quantifiable evidence of your product,” he told the audience.  

Twilio is the first IPO for 500 Startups. It’s also the first US venture-backed tech IPO of 2016. Since its launch in 2010, 500 Startups has made 1,200 investments across 60 countries. VC investments in communications and networking companies reached $968.4 million in the year ended March 30, according to Dow Jones VentureSource data.

500 Startups has seen other exits mainly in the form of acquisitions, including:

• $403M acquisition of Makerbot by Stratasys
• $350M acquisition of Wildfire by Google
• $200M acquisition of Viki by Rakuten
• $117M acquisition of Simple by BBVA

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