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.” >>>

Seed Capital From Angel Investors: Alan Rossiter, Vice Chairman, Springboard Capital (Part 11)

Alan: Another one is in the financial services arena, and it has been cash flowing now for over twenty-four months, and it doesn’t get any better than that. When a company is just internally building cash, it’s a wonderful thing to see and we’ll probably look at exit on that company possibly even this year because there’s a lot of interest in it. But getting the company to cash flow is everything. >>>

Seed Capital From Angel Investors: Jeff Clavier, Founder and Managing Partner, SoftTech VC (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: How many people work for the fund?

Jeff: It’s just me. I am a workhorse. I have done eighty-two deals in the past six years on my own. And I do support my companies and I do help them and work with my CEOs despite the large number of companies. >>>

Seed Capital From Angel Investors: Alan Rossiter, Vice Chairman, Springboard Capital (Part 10)

Irina: Do you have any sector preference?

Alan: No, but I’ll hit on a couple. First off, one of our criteria – and I call it a soft criterion, but it’s a general guideline that we adhere to – is that within Springboard’s membership, it’s 53 partners, if we don’t have anybody who has expertise in that industry, we generally will not invest in it. I can’t exactly tell you what sectors we invest in but if you tell me a sector, I’ll tell you whether we invest in it. >>>

Seed Capital From Angel Investors: Jeff Clavier, Founder And Managing Partner, SoftTech VC (Part 1)

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. >>>

Seed Capital From Angel Investors: Alan Rossiter, Vice Chairman, Springboard Capital (Part 9)

By guest authors Irina Patterson and Candice Arnold

Irina: At what stage of a company’s development do you usually invest?

Alan: Post-revenue. To be a little bit more precise, it’s post-revenue but probably before they have a sufficient customer base to interest the venture funds. Venture funds look at companies at various stages but tend, today, to be looking at companies a little bit later than they were five or ten years ago. And that may be three years of revenue, a couple years of revenue. We like companies normally in their first year of revenue. >>>

Seed Capital From Angel Investors: Alan Rossiter, Vice Chairman, Springboard Capital (Part 8)

By guest authors Irina Patterson and Candice Arnold

Alan: In our valuation, we generally ignore almost all the analytical things like discounted cash flows and those types of approaches and simply look at exit – and our expectation of exit is never accurate, of course – to try and figure what kind of internal rate of return we would likely get under given scenarios.

And we want to be in some place that’s in the 20%-plus range of internal rate of return. Looking at it with those metrics known and a pretty solid-looking pro forma, you can come into range of where the valuation ought to be and if it’s there and we like the company, we’re going to invest.

If it turns out it’s a high valuation or a low valuation, we don’t very much care as long as the company is, in our opinion, properly valued. >>>