Seed Capital From Angel Investors: Jeff Clavier, Founder and Managing Partner, SoftTech VC (Part 9)

By guest authors Irina Patterson and Candice Arnold

Jeff: The one thing that we have going for us is that we do see so many patterns and so many deals and teams. We’ve done so many experiments – eighty-two, in my case, over six years – and seen what’s successful and what’s unsuccessful.

Each deal is different, but you look for patterns of success and try to avoid patterns of failure.

Vinod Khosla said once that it takes ten years to be a potentially good VC because you need to have all that experience baked in to figure things out.

And you’ve seen enough things and made enough mistakes and seen enough things screw up that you can start developing that pattern of recognition. I’m getting into my eleventh year of being an investor. I am just getting there.

Irina: So, you see about 2,000 deals a year and you invest in about fifteen. The businesses that you don’t invest in, do you refer them to anybody, or give them advice or anything?

Jeff: No. Time is my number one resource and constraint. I have to deal with a massive portfolio. I have a huge deal flow. I’m on my own. I have fiduciary duties to my investors, so I cannot spend time doing a clinic of every company that visits me because then I wouldn’t have enough time in the day to do that.

If I see something to give advice on, I will do that, especially if we meet face to face. But that will be it, and I never refer people to others. Given who I am in the market place, if I send a deal to someone saying I passed, but take a look, it will have tagged the investment as “If Jeff passed, why should I bother?” So, I always tell people, “Maybe you want to talk to so-and-so,” but I rarely make the referral; it has a negative connotation.

Irina: You said, the consumer Internet space is all you do. Do you purse any particular themes or subcategories of that space?

Jeff: I look at consumer Internet broadly. I do a few categories, such as search, social media, monetization, and B2B and B2C Web services. I’m fond of gaming deals. These days, I’m very fond of monetization, so the last three deals I did were monetization related. How can I help publishers make money, right?

But I don’t have big themes or big trends that I’m pursuing. There are a ton of big data-related opportunities because all those consumer places create billions of touch points of customers every day. So, whoever aggregates those will learn so much about consumer intent, consumer behavior, and so forth.

Irina: Great insights, Jeff. Thank you, and I hope to catch up with you again in the near future.

This segment is part 9 in the series : Seed Capital From Angel Investors: Jeff Clavier, Founder and Managing Partner, SoftTech VC
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