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Seed Capital From Angel Investors: Jeff Clavier, Founder and Managing Partner, SoftTech VC (Part 7)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you think about the return you would like to have over a certain period?

Jeff: I don’t really think about the term in terms of time because you can’t force exits, you can’t precipitate things. You can’t say, “Hey, I want this performance over this period of time.”

What I need to convince myself of is that if I look at a business and say, “Hey, based on the valuation that I invest in, can I see a ten times return at some point in the future, five, seven years,” it doesn’t matter, because I believe that there is scale in what I see in that business. >>>

Seed Capital From Angel Investors: Brad Feld, Managing Director, Foundry Group (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: Let’s talk about your deal flow. Where do you get your deals from?

Brad: They come from all over the place. I think a chunk of them come from people who we already either know or have an existing relationship with, who we’ve worked with before. Then a chunk of them come from just outreach from me and my three partners.

We’re all very public. We blog very aggressively about the various themes that we invest in. And we take an approach where all four of us invest in the same types of companies. We all work on everything together so, our approach tends to be one that we describe as thematic. Within each of the themes, we generally try to be intellectual thought leaders around what’s going on at a deep technology and product level in those themes. >>>

Seed Capital From Angel Investors: Jeff Clavier, Founder and Managing Partner, SoftTech VC (Part 6)

By guest authors Irina Patterson and Candice Arnold

Irina: In the past twelve months, how many investments have you made?

Jeff: In terms of new investments, not follow-ons, I did twelve.

Irina: What was the average dollar amount that you invested?

Jeff: Those were between $100,000 and $200,000. >>>

Seed Capital From Angel Investors: Brad Feld, Managing Director, Foundry Group (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the fifteenth interview in our series on financing for entrepreneurs. I am talking to Brad Feld, managing director of Foundry Group , venture capital firm focused on making investments in early-stage information technology, Internet, and software startups, based in Boulder, Colorado. >>>

Seed Capital From Angel Investors: Jeff Clavier, Founder And Managing Partner, SoftTech VC (Part 5)

By guest authors Irina Patterson and Candice Arnold

Jeff: Then I look at the product, the concept, is it differentiated? Have I seen ten or twenty versions of this thing in the past? Is it unique? How defensible is it? How replicable is it? Is it something that people are going to look at and say, “Duh, it’s obvious.” They could be doing the same thing.

How can they grow this thing? Is it like, “Well, I’m going to have grow each user one at a time spending money using traditional marketing techniques? Or do I have a shot at using customer referrals and viral link-ins? >>>

Seed Capital From Angel Investors: Alan Rossiter, Vice Chairman, Springboard Capital (Part 12)

By guest authors Irina Patterson and Candice Arnold

Irina: What do you think angel-backed founders could do to increase their chances of success?

Alan: Have a very rich father. No, seriously, there are a couple of very common errors that companies make that if they could avoid those, they’d really make – particularly the capital raising aspect – a whole lot easier.

One is to seek advice and counsel, possibly from an attorney. Certainly if it’s an attorney, it needs to be a securities attorney, concerning expected investment in terms of valuation. It is a tremendous problem in our industry when people just have no realistic basis to understand what kind of investment would interest an investor. >>>

Seed Capital From Angel Investors: Jeff Clavier, Founder And Managing Partner, SoftTech VC (Part 4)

By guest authors Irina Patterson and Candice Arnold

Irina: On average, from all sources, how many pitches do you receive a month?

Jeff: It’s hundreds. It varies. I would say like five to ten a day on average. And then some days are busier so, it really depends. A lot of those sometimes aren’t qualified. What I’m always saying is that basically every week, I’m going to meet a team, an entrepreneur, people doing something.

At least one or two of those meetings are genuine investments that I could make. So I do fifteen to twenty deals a year and I see fifty to one hundred companies I could invest in, and that’s me filtering which ones are right for me and so forth. It’s a massive funnel. We see hundreds of opportunities, and we end up doing two or three deals. >>>

Seed Capital From Angel Investors: Jeff Clavier, Founder And Managing Partner, SoftTech VC (Part 3)

By guest authors Irina Patterson and Candice Arnold

Jeff: Sometimes people will catch my attention. Someone the other day reached me via Twitter. I looked at what he was doing. It was a 20-year-old kid who was trying to put a company together, so I gave him some advice around how to think about his valuation, how to think about his raising money because he didn’t really know.

I told him, “Figure out how much you need and then ask for that. The next question I’m going to ask after asking how much do you need is, what do you need it for? And if you can’t answer what for, then it’s not going to happen.” >>>