January 9, 2014
At TCWEEK last night, SoftTechVC founder Jeff Clavier joined us for a special fireside chat in downtown Vegas.
Since 2004, SoftTechVC has invested in almost 150 companies. They pioneered the “micro-VC” fund, making investments ranging from around $500,000 to $1 million. SoftTechVC is currently doing about 20 investments per year, focused on Silicon Valley, New York, and Los Angeles.
While Clavier dished out his straight-to-the-point opinions on everything from funding to CES, he also revealed a bit about the mind of the VC. Here are seven things you should know about venture capitalist psychology.
1. If you ask VCs what they’re looking for in an entrepreneur, they can’t really tell you. “It’s super hard – that’s why we try and stay fuzzy [i.e., vague],” said Clavier. “Have you noticed that when you ask a question to a VC, the first thing he does is ask another question?”
2. There’s no objective standard across all VCs. “Someone’s piece of shit is someone else’s Pinterest,” said Clavier (who passed on Pinterest because he thought it was “ugly” at the time).
3. VCs don’t have some secret deal breaker. To get funded, you just have to have enough positive attributes. “Think of it as a scale – every component of the deal is big weight, more weight, a bunch of weight, and at some point you will tilt,” said Clavier.
4. VCs are “professional no-sayers.” Clavier only says yes to about 0.3 percent of startups that approach him. When asked if he practices giving rejections, he replied…“no.”
5. VCs are expecting you to raise another round of funding in 18 months after seed funding.
6. VCs have to build up their confidence, too. “At the beginning, [investors] make a ton of mistakes and you’re lucky, lucky, lucky,” said Clavier. “And after a while, it feels like maybe you’re actually a little bit good.”
7. VCs aren’t just motivated by money; they feel pride in the companies they’ve funded. “What’s cool is to get to CES and to see that big-ass Fitbit booth,” said Clavier, who invested in Fitbit. “That is actually a real satisfaction.”
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