On Wednesday, Jeff Clavier joined us for a fireside chat at TCWEEK in downtown Las Vegas. He’s the founder of SoftTechVC, a “micro-VC” fund based in Silicon Valley.
Clavier confirmed the existence of the famed Series A crunch, where many startups get seed funding but only a fraction are able to raise more than that.
“In the Valley, it feels like if you walk up and down University Avenue in Palo Alto, you’ll get funded,” said Clavier, noting that the number of seed-funded companies has tripled. But “if you want to go for venture-scale funding, there is just a finite number of firms and dollars you can go to.”
SoftTechVC’s portfolio companies have weathered fairly well, he said. In the past eight weeks, they have been offered $110 million in term sheets for later-stage funding. But the Series A crunch means that SoftTechVC is raising the bar for which startups they’ll invest in.
In the end, the dynamic of startup funding is just shifting, Clavier said. “The problem has shifted from ‘Will I get seed funded?’ to ‘Will I raise my Series A or Series B?’”