As an entrepreneur pitching to angel investors, you have a lot on your mind. You have to nail your pitch and anticipate their questions, all while staying cool and charismatic. Preparing your pitch is of paramount importance, and a crucial component of this is knowing exactly who you’re pitching to.
We’re here to help.
Tech Cocktail’s Angel Spotlight Series is a weekly feature of prominent angel investors around the country. We give you the lowdown on their investing strategy, top advice, and deal breakers, and hopefully reveal that, just like you and me, angels are people, too (with deeper pockets).
This week we chat with Jeff Clavier, the founder and managing partner of Palo Alto-based SoftTech VC. His firm has made over 110 investments, including Eventbrite, Mint, Fitbit, and Fab. Before SoftTech VC, Clavier spent 16 years as an entrepreneur, executive, and investor in enterprise software.
Jeff Clavier: We have a very specific portfolio construction strategy, with a 5% to 10% ownership target and 3 key sectors we’ll do most of our investments in (mobility, e-commerce/marketplaces, cloud services and infrastructure).
We look for the usual mix: awesome founding team, great product with clear differentiation and initial customer development done, in a market that will support scaling to hundred of millions in revenue. Most of our investments (80%) will be in the Valley, though we are increasingly investing in NY and SoCal.
Top advice to entrepreneurs
Clavier: Don’t turn to entrepreneurship because it is cool or fashionable, do it because you have a burning desire to build a company or a product that will be long lasting and have an impact.
Understand that entrepreneurship is really hard, and only total commitment and determination will allow you to survive all the challenges you will face.
Hire slowly, focusing on A+ talent. Fire quickly any subpar player who will drag down the company’s overall performance.
Common advice that you disagree with
Clavier: “If you are not embarrassed by the first product you release, you waited too long” – this might have been the case, but now that there are dozens of products and startups launching every day. You can’t afford not putting something decent in front of your users.
Top mistake entrepreneurs make when pitching to you
Clavier: Not having done their homework about who we are and what we invest: asking questions like “Does SoftTech do seed investments?” or “Are you interested in consumer Internet startups?” is a sure way to show that you are out fundraising randomly. A classic from a couple of years ago: “Have you heard of Twitter?”; being @jeff that made me laugh.
Showing up with a product that you claim is disruptive while it is only marginally different or better from existing solutions. Corollary: not knowing your ecosystem or competition.
Telling me that the company will be acquired in 3 years by Google, Facebook, or Twitter – and mentioning the IRR of the transaction.
Most cherished accomplishment
Clavier: Having the opportunity to work with 100+ awesome, smart, focused entrepreneurs like Aaron Patzer (Mint/Intuit), Tod Sacerdoti (Brightroll), Ted Rheingold (Dogster/Say Media), Kevin Hartz (Eventbrite), Wendy Lea (GetSatisfaction), Victoria Ransom (Wildfire), Jack Abraham (Milo/eBay), James Park (Fitbit), Jason Goldberg (Fab), Paige Craig (Betterworks), Manish Chandra (Kaboodle/Hearst, Poshmark) – and so many others; it is unfair not to list them all.
And every now and then, making a real difference to these companies by offering a key insight, connection, investor, etc.
In your free time you can be found…
Clavier: Free time, what? I’d say that skiing or hiking the mountains in Kirkwood is probably what I spend most of my (limited) free time doing.