By guest authors Irina Patterson and Candice Arnold
This is the fourteenth interview in our series on financing for entrepreneurs. I am talking to Palo Alto-based Jeff Clavier, founder and managing partner of SoftTech VC, an early-stage venture capital firm managing a $15 million seed fund, SoftTech VC II.
Irina: Hi, Jeff. Could you tell us briefly about your personal background?
Jeff: I’m French born, raised and educated there. I have a master’s in computer science, with a minor in distributed computing. When I was at school, I did a startup in the financial services market (Effix Systems) that we sold to Reuters Venture Capital in 1993.
I spent seven years at Reuters. I was the head of developmental engineering of the startup they had acquired, plus a bunch of other groups. I built a number of systems for them, both front office, mid-office and distribution systems that are used today all over the world.
In 2000, I moved to corporate venture arm of Reuters. I said that I would basically move to the Valley and be the partner in the United States. for the fund. That’s what I did for four years, from 2000 to 2004. And then in 2004, I decided to go on my own and started investing as a business angel in a bunch of very early-stage consumer Internet companies that ended up being some of the backbone of Web 2.0.
Some early exits led me to have quite a bit of success. My very first investment was Truveo, which was an early video search engine that we sold to AOL for quite a nice number after a year.
I was lucky essentially five times in the first three years of my investing, which gave me the option to raise this fund called SoftTech VC II, which is a $15 million seed fund that I’m investing out of today. As of now, after three years of running the fund, I have done 52 investments, mostly in the consumer space.
Out of that, I’ve already had six exits, one of which was Tapulous, which we sold to Disney a week and a half ago.
Irina: What is your geographical focus?
Jeff: Eighty percent of my investments are in Silicon Valley – 65% are actually in San Francisco – 10% are in New York and 10% are in Boulder, Colorado. I will also invest in other tech centers like Seattle, for example.
But the issue for me is that a lot of the work I do is high touch, spending a lot of time with the companies, really helping them on the ground. So, it’s more challenging for me to do my work if I’m not local, which is why the vast majority of the deals I will invest in are here. I could invest somewhere else in the United States and help the company move out here, in which case the company becomes a Silicon Valley company.