Dave McClure’s incubator launched back in February 2011 after 500 Startups had already invested in about 100 companies, and the group is set to hit its namesake number of investments this year, between the incubator and outside companies. This summer group will be the sixth batch of companies to go through the incubator.

The full list of the 28 companies can be found on AngelList, which is now required for companies applying to the program, beginning on Tuesday.

Apart from the list of companies, here are a few facts about the latest bunch:

• Eight of the 28 companies, or about 28 percent, has a female co-founder, and two of those women are CTOs for their companies.
• Two-thirds of the companies, or 20 of the 28, are international, continuing a longstanding 500 Startups penchant for investing overseas. The companies come from a variety of countries including Brazil, Chile, China, Ghana, India, Israel, Japan, Jordan, Mexico, Spain, Switzerland, Taiwan, Ukraine, and Vietnam. 500 Startups recently added a partner in China.
• One of the companies called Dropifi is the group’s first investment in an African companies, and two of them, Dakwak and Tamatem, are the first Middle Eastern accelerator companies.

Our coverage of the fifth batch that launched in February can be found here, and we’ll be covering the demo day for this batch in July.

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But developing apps that will appeal to kids is a real challenge. A variety of enterprenuers and developers who work with technology intended for kids and parents spoke at the 500 Startups Mamabear conference in Mountain View Friday, where they talked about the challenges but potential benefits of building for the younger set.

Complying with privacy guidelines

One of the biggest hurdles for app developers — which should comfort parents concerned about the privacy of their kids — is complying with COPPA, the regulations from the FTC that limit the data that developers can collect from kids like names or photos, and which require developers to attain permission from parents before they acquire any data.

Building a viral social app while complying with COPPA can be tricky, and most notably, COPPA got Path into trouble when an FTC investigation found underage users on the app, which led to a $800,000 fine for the company and 3,000 accounts getting purged from the system.

Shai Samet, a lawyer and privacy consultant who runs the startup kidSAFE Seal Program, talked about how developers can work with the COPPA guidelines to create apps for kids, reminding them that all sorts of information, from real names to photos to videos to geolocation, is all information you need parental consent to collect. You also can’t include social plug-ins for apps like Facebook, or include behavior tracking ads like Google ads, both of which are common monetization strategies, if they’re targeted at kids.

“There’s really three key strategies to avoid COPPA regulations in some scenarios and be able to scale user growth,” he said. Samet pointed to three different tactics, which include anonymizing data from kids (so you’re not collecting real names), limiting sign-ups to kids over age 13 (if acquiring younger users isn’t a requirement for success), and picking the easiest form of acquiring parental consent (avoiding credit card numbers or social security numbers if possible and opting for email instead.) Shamet’s full presentation can be found online here.

App-testing with more distracted users

Plenty of app developers will host focus groups for their target audience to see how people respond to products and how they interact with devices. But when it comes to app-testing with kids, (especially those who aren’t verbal yet), it can be a lot harder to get feedback.

Sandra Oh Lin, the founder and CEO of Kiwi Crate, talked about how to do focus groups and app testing with kids, and how it can depend on the age of the kid with whatever tactic you take.

“Adults have no problem telling you what they think,” she said. “They’ll walk you through and say, ‘Here’s why I’m tapping on this.’” But for kids, you have to do a lot more observation to see how they interact with a game, since they might not tell you why they don’t like something. Plus, they’re extremely prone to distractions, and keeping them focused on the task is tricky too.

But if your focus group works well? Remembering to contact all of those people when your product ships to tell them about it can give you an automatic user base to start with.

Figuring out the content that works

It sounds obvious, but the people designing the apps for kids aren’t kids themselves, so figuring out the content that appeals to them can be somewhat of a learning process.

Mark Schlichting, CEO of NoodleWorks Interactive, said that in creating content for kids, age matters. For instance, an app designed for a toddler who doesn’t yet associate letters with words will have a totally different impact when the game is played by an eight-year old. Some age groups might find some material terrifying that wouldn’t bother a slightly older age group — understanding your audience here is key.

Plus, kids often find new uses for an app that the developer didn’t even intend. Schlichting said they found that kids were tapping a particular part of the app in a way that caused it to crash. A developer asked him if they should fix the app and make it un-tappable, but instead he said it’s important to capitalize on how kids are using it.

“I realized, this is an inherent play pattern that we didn’t know was in here,” he said. What are the things kids like in an app? Everything in an app should be highly tappable, responsive, and interruptive, he said. ”Don’t trick ‘em.”

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Parker Thompson, who was previously the director of business development for Pivotal Labs, will be joining Dave McClure’s startup accelerator and investment firm. 500 Startups wrote in a press release how Thompson’s new role will fit with the group:

“We’re also pumped to announce Parker Thompson as the latest addition to the our team. He’ll work with our accelerator program while also helping us grow our presence in the San Francisco startup scene. He comes to 500 from Pivotal Labs, where he built dozens of startup products and helped grow the team from 10 to 150 before the company was acquired in 2012 by EMC. Parker also co­founded a location-­based social networking company pre­-smartphone, and worked at Internet Archive on big data problems before the term even existed. Basically, he was working in tech before it was cool.”

Existing 500 Startups employee George Kellerman will also be promoted to partner at 500 Startups, and partner Paul Singh is now founder and CEO at dashboard.io, although he will continue to work as a partner as he did before.

Dave McClure’s 500 Startups has always had an international focus, and debuted its most recent batch of companies back in February.

The accelerator is also officially announcing that it has opened a New York office, and has plans for one in San Francisco (the group is currently located down in Mountain View.) The addition of a San Francisco office is interesting in light of the recent trend among some internet companies like Airbnb and Pinterest moving up to the city.

To continue our east coast takeover and support #500Strong NYC­based startups, we’ve opened an office in Manhattan’s historic Flatiron district. In addition to providing space for our startups (and 500 Venture Partner Shai Goldman), we’ll use the space to host meetups, tech talks, and (of course) parties. To get some hipster cred back on the West Coast, we plan on opening a San Francisco office sometime within the next year. We’ll have more on that when it happens.”

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On Thursday Facebook announced that it has acquired the talent of design firm Hot Studio. Facebook said it’s been working with Hot Studio for the past few months, and the acqui-hire follows in the footsteps of Facebook bringing in designers like Nick Felton, Mike Matas, and Nate Bolt.

Also on Thursday venture firm NEA announced the launch of NEA Studio, a 12-week program in New York for design founders of web and mobile startups. NEA said that during the program founders will work with designers and NEA portfolio companies, and the founders that excel will have the opportunity to work on launching a product and can use NEA’s workspace and receive a stipend.

The NEA news is similar to the announcement by Kleiner Perkins back in November that it is launching a design fellows program. Google Ventures has been aggressive on design work with its Design Studio, as has 500 Startups with their design fund and Greenstart with its in house designers.

Mobile apps, web products, and wearable connected devices are winning and losing based on the designed user experience and user interface of the product. Well-designed products like Path and Pinterest have emerged as leaders, while sites that haven’t evolved with good design haven’t.

Another aspect behind this trend is that the internet, mobile networks and computing are maturing, and the way regular people — not tech nerds and early adopters — interact with these technologies is fundamentally changing. Google and Apple both have their audio AI computing products — Google Now and Siri, respectively — and touch has started to become the de-facto standard for mobile devices.

At the SXSW Interactive festival this week, there seemed to be a greater presence of talks from designers and design founders than in previous years. During one such panel Tony Fadell, the CEO and founder of Nest, talked about how good design has always existed but has more recently, with the rise of Apple, become more democratized.

But designing a winning UX (user experience) for a targeted audience can be tricky, which is why designers are starting to be so highly coveted. On the SXSW panel, Fadell and Jawbone CEO Hosain Rahman talked about the importance of iteration and testing and Rahman said Jawbone’s connected wristband product UP had over 200 iterations. Still, the first version of the Jawbone UP flopped, and the company replaced those early versions with a version 2 of the product.

Wearables in particular can be tricky, as the world of computing hasn’t previously had to think much about the UX of the body. Google has reportedly started working with designer glasses company Warby Parker for the design of its Google Glass, augmented reality glasses.

We delved into some of these connected design topics at our second annual RoadMap event last year, and we think design is such an important trend that we plan to keep that conversation going throughout 2013. Our third annual RoadMap event will take place later this year in November.

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Startups interested in participating in 500 Startups can apply through the program’s AngelList page beginning January 31, 2013. Previously, companies had to get an introduction through the program’s alumni network to apply, although beginning with the most recent class they began experimenting with open applications on AngelList.

“We feel like as more people know about 500 and we try to expand more into other markets, our network is still, compared to the rest of the community, not that big,” said Christine Tsai, 500 Startups partner. The program has always had an international focus and has welcomed founders from outside the United States, so widening the application process even further makes sense. Although Tsai noted that by nature, an open process means plenty more mediocre applications, but the diversity is worth it in the long run.

“That’s just how it is,” she said. “We’re still going to rely a lot on referrals.”

The application process will stay open until March 1, although company applications will be evaluated on a rolling basis. The program’s fall accelerator batch will have its demo days in Mountain View and San Francisco next week.

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After the last batch presented at a demo day in July, 500 Startups accepted this group of companies on Oct. 4 and will groom them for a February demo day, said 500 Startups partner Christine Tsai. The accelerator and seed fund will likely hit its namesake goal of investing in 500 companies in 2013, and has been particularly successful so far with international growth.

The full list of startups can be found online here. Some fun facts about the curent batch:

• 7 of the 33 companies, or 21 percent, have at least one female founder. While this number might not seem especially high, compare it to the only four percent of female Y Combinator founders accepted on average from 2005 to winter 2011.
• 19 of the 33 companies are international, reflecting founder Dave McClure’s particular focus on looking outside the United States and Geeks on a Plane efforts. The current class has companies from Argentina, Austria, Australia, Brazil, Croatia, Denmark, India, Italy, Latvia & Estonia, Spain and Taiwan.
• 500 Startups received “hundreds” of applicants via AngelList, since it was the first time they’d done a formal application (previously they selected companies through referral). However, they selected only eight companies from those applicants, putting the AngelList acceptance rate at less than 2 percent.

Thanks to the success with using the AngelList and application process, Tsai said she thinks they’ll use a similar process in the future, although referrals from founders of 500 Startups portfolio companies still play a large role.

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Salt Lake City, Utah-based Alta Ventures has arguably done more than any other firm in terms of building the venture capital community in Mexico. The Mexican arm of the firm, led by Rogelio de los Santos and Paul Ahlstrom, started looking for a new optimal place to invest in startups back in 2005, and after crunching the numbers decided on Mexico. Mexico has high growth potential, a large market size of over 50 million people, a GDP per capita of under $14,000, political stability, a decent history of human rights, and enough business and entrepreneurship indicators like a small number of days needed to start a business.

Landing on Mexico as the perfect place for VC investment was even a shock for the firm. Ahlstrom told me during a talk in Mexico City in May that “Our image of Mexico was dusty, sombreros, drug problems, immigration issues. Not high tech.” But Ahlstrom worked for years on developing a VC ecosystem in Mexico, including working on enabling pension funds to invest in venture capital funds, and organizing conferences to bring together the community.

The $70 million fund is Alta Venture’s first fund in Mexico, and includes investment from International Finance Corporation (IFC), Fondo de Fondos (CMIC), the Multilateral Investment Fund (MIF), 29 families in Monterrey, Mexico, 500 Startups, and the Guadalajara Angel Investment Network (GAIN). Alta Ventures has already invested in Mexico startups across sectors including web invoicing company Diverza, cleantech company Energryn, social gaming group Juxta Labs, and Rhomobile, which was sold to Motorola in 2011.

Image courtesy of Arturusoft.

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Mexican VC co-founder César Salazar tells me in a phone interview that you can think of the deal like an acquisition of his firm, but he also didn’t disclose any financial details of the deal. The press release announcing the move jokingly calls it a “hostile takeover.” The partnership will be 500 Startup’s first international accelerator.

The model of partnering with a local team in a developing market makes sense for 500 Startups. The team — which is looking to invest small amounts into literally 500 startups all over the world — can’t fly everywhere all the time or know all the little details of every market.

Mexican VC is a small accelerator, which was founded last year, and Salazar had been working on raising a $5 million fund. The firm has invested in startups that 500 Startups has later worked with, like virtual phone system called Fontacto (like a Google Talk for Latin America), and educational game maker Yogome. Mexican VC has also backed NuFlick, a Netflix for Mexico, and Conekta, a Shopify for Mexico.

The two groups seem to share a similar culture: Entrepreneur-focused, a little counter culture, and an emphasis on enthusiasm. “We [both] believe in starting small, proving that your product doesn’t suck through quantitative data and making sure that you know that everyday you can fail but you can keep going and prove to the world that you’re solving a big problem,” says Salazar.

The investing model will continue in Mexico, too. McClure’s investment thesis is to do a Moneyball type of strategy, playing the odds, and backing a lot of companies in under served verticals, and by under represented entrepreneurs, like women.

McClure seemed particularly interested in the Mexico startup market during the Geeks on a Plane trip. The country has a lot of the Internet and mobile growth potentials as other hot markets in Latin America, but it doesn’t have the investing bubble of a country like Brazil.

At least that’s the pitch — it’s still very much a developing market. More than anyone, a Mexican venture firm called Alta Ventures, led by Paul Ahlstrom, has worked tirelessly to develop a venture community in the country.

Expect 500 Startups to back more startups outta Mexico, and greater Latin America. In the release on Tuesday, 500 Startups says it will announce another ten investments in Mexico next week.

Read my (longish) profile of Dave McClure and 500 Startups here.

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Khosla described that initial seed fund back in 2009 as available for the “highest risk projects,” that “often cannot find any other funding.” The California pension fund committed to invest about $60 million into that first early stage seed fund. At the same time, back then Khosla Ventures also closed a more traditional $750 million fund, and these two funds were one of the first times that Khosla Ventures had used outside investors for a fund — previously Vinod Khosla had been investing his own funds.

Fast forward to late 2011, and Khosla Ventures closed on its fourth fund of $1.05 billion. When that was fund was closed, Khosla Ventures said that it would not be changing its strategy of investing, and would continue to invest in Internet, mobile and clean tech ventures “roughly in the same ratio as previous funds.” Essentially the firm was saying it’s not moving away from cleantech investing.

But the returns for most venture capitalists in cleantech have been hard. Khosla Ventures Partner Pierre Lamond told the San Jose Mercury News recently that Khosla Ventures “still invests in cleantech,” but “the firm is getting fewer pitches from cleantech entrepreneurs.” “People are shying away from cleantech and it’s clearly slowed down,” said Lamond, though he also said that there are bright spots still for batteries for electric vehicles and energy storage.

The fact that the fund is a seed fund is an indication that Khosla Ventures, like many other traditional venture investors, are now looking to find web and mobile startups at the very early stage. There’s been an increasing amount of competition at this level by incubators and accelerators, like Y Combinator and 500 Startups.

We’ll add more information about this filing for the Khosla Ventures Seed B when we know more.

Image courtesy of GigaOM.

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I have no idea if the lawsuit has merit or how likely it is to succeed. But I do know that gender discrimination and sexual harassment are alive and well in the traditional venture capital community and to some extent in the Valley. The issue is something that I’ve talked about ad nauseam with female founders, reporters and press over the almost ten years of my Valley reporting career. It’s not a secret — if you’re a woman that works in the Valley, you’re familiar with this.

But the reality is that this old school, old boys club mentality, is one of the many things about the established venture capital community that will need to, and I think eventually will, change, purely for competitive reasons — not necessarily because Sand Hill Road all woke up one day and took a class on gender discrimination. If firms are under utilizing women investors and are seen as unfriendly to women founders, it’s a competitive disadvantage.

Some of the younger, more nimble, incubators and firms know this and are actually using how undervalued women are in the traditional venture capital community as a competitive advantage. For example, an investment thesis behind 500 Startups is to invest in under-represented groups — both women founders and founders of color — and women make up more than half of the small team of 500 Startup’s partners.

There’s a growing amount of women founders taking place in Y-Combinator every year, though it’s still pretty small. But if a firm has a reputation for being not friendly towards women, then it’s just another barrier to doing these types of deals in an increasingly competitive environment. Internet firms like Etsy are trying to proactively grow — and then tap into — an emerging population of women engineers and developers. It makes sense, they’re a population that’s being under utilized. Women 2.0 is trying to grow a female founder, mentorship ecosystem as well.

There’s a lot of things that aren’t working for the traditional venture capital world. The Kauffman Foundation issued a report recently that found that the venture capital industry was not delivering the desired returns, and basically not adjusting to the times. I feel like an old-school mentality around gender is just another symptom of that failure to evolve. And VC firms that are continued to be seen as old boys clubs will just miss out on potential investment opportunities.

Tech Crunch and Fortune point out that Kleiner has more female partners than most, and that it’s been trying to lead in this area. I’m not sure what will happen with Kleiner’s lawsuit, but the fact that it’s out there publicly, clearly isn’t good for building their reputation around being women-friendly.

Image courtesy of stevendamron.

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