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.

Though I should say, of the eighty-two investments that I’ve done, I’ve already sold twelve. I’ve lost a few; you know not all companies work.

So, I have a really active portfolio of about forty companies because some companies are sort of mature. After they’ve been around for six years, they have VCs, a bunch of people involved, so they don’t really need me to be active with them. There’s a time element to the involvement of people like me.

Irina: What are your current sources of deal flow?

Jeff: I’ve been a super angel, micro-cap VC for six years. I’ve been an investor for ten years and I have worked with eighty-two CEOs. That creates a massive network of people in the community referring deals to me.

I have invested with a number of firms five times, ten times . . . over and over, and that also creates a massive referral network.

Many VCs will send me deals. A bunch of friends in the community and the industry will send me deals. My latest investment reached out to me after seeing my interview on TechCrunch TV. They reached out to one of their angel investors saying, “Hey, we love Jeff. Can you make an introduction?”

There are a lot of things I do in the public. I very often speak at conferences. I’m often cited in the media. I have my own blog, I tweet a lot. There’s a lot of visibility for what I do so, that brings massive deal flow.

Irina: Out of those, which source brings you the best deals?

Jeff: It’s definitely the close network referrals. Everything coming from my CEOs, from my day-to-day coinvestors, they know exactly what I invest in and so those will be the most relevant deals that I see.

But there is an element of serendipity in what we do. You never know where your next deal is going to come from so you have to be on the lookout for it. But anything that is coming from a trusted source, people who know exactly what I do, while working with me on a daily basis – my CEOs, my coinvestors – those will be the highest probability of deals that I would look at.

Irina: If an entrepreneur is really smart and knows how to connect, can he or she just send a pitch to you via e-mail?

Jeff: Yes, of course. But given the mass of business plans and proposals and referrals that I get, there is a long list of deals that I’m getting. I will try to go through each of them, but if you want to get to the top of the pile, you get someone who is close to me to make a referral.

If you want to get somewhere down the pile, you do a sort of cold e-mail. It’s bad because I would love to respond to each and every one of the hundreds of e-mails I get per month. The problem is that because I’m on my own, I can’t.

This segment is part 2 in the series : Seed Capital From Angel Investors: Jeff Clavier, Founder and Managing Partner, SoftTech VC
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