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Sheer accident and luck was the word Uncorck Capital (Previously SoftTech VC) Founding Partner Jeff Clavier used when asked how he first got into startups and how he ended up in venture capital. While luck does play a big role in life, Jeff was also very good in taking advantage of opportunities given to him and seizing the moment. As someone who has hundred of investments under his belt and was one of the original super angels back in the 2000s, Jeff shared how he first got into tech, his first foray into investing right after the dot.com boom and what he’s learned from being an early investors in companies like Fitbit, SendGrid, Postmates, Eventbrite and more.
From First Developer to CTO to Reuters
Back when Jeff was a computer science and engineering student in Paris, one of his professors told him about an internship opportunity for a finance type of brokerage. He took the opportunity and during the internship, he got the chance to meet a tiny startup called Effix Systems that was building innovation applications for traders in France. He would end up interning at the startup and became an early developer.
He shared, “I spent the rest of my engineering career in college working at the startup at night, and I ended up becoming the CTO of the company and we were very successful. We expanded into the US market and got acquired after 5 years by Reuters.”
At Reuters, Jeff would manage multiple developer teams in New York, Palo Alto and London then after 7 years he decided that it was time for a change. He shared, “Once again by sheer accident, the guy who was running the venture fund of Reuters happened to be in Paris so the following Monday after I had lunch with a buddy of mine that just joined them, he said, ‘oh why don’t you have tea with the guy who runs the venture fund of Reuters’.”
After grabbing tea with the head of Reuters venture fund, Jeff would be hired to use his strong operational background to manage the investments that Reuters had already made right after the dot.com bubble explosion.
Realizations from the Post-Dot.com Boom
Jeff recalls the aftermath of the post-dot.com era as a total disaster because of majority of the companies having unsustainable business models that were being funded and raising one round after the other and going for an IPO a year later.
He shared, “You had all these companies with insanely high burn rates and didn’t really have any products and didn’t really have business models. They had negative gross margins and all they were thinking about was grow grow grow and burn burn burn.”
As someone who had experienced working in a startup that had discipline, good margins and was bootstrapped, Jeff was frustrated by what he was seeing along with having to spend too much time in bankruptcy court. He recalls having to testify for one of the companies right after he had his ACL repaired—a moment he wouldn’t forget.
At the same time, this period in time was when the new generation of consumer internet companies were showing up that were raising less money, which intrigued Jeff as an opportunity to come in and invest in these companies. He shared, “I went to my wife and said hey I want to take some of our savings and essentially take 18 months of to play angel investor and do nothing but that.”
Writing the First Check
Jeff started his angel career with a $250k budget to invest in 10 companies with $25k each. At that time, nobody really knew who Jeff was so he had to hustle in order to find the best deals. He shared, “So I did the cheesy thing and started a blog because back then only a handful of VCs were bloggers. So I started writing about startups and funding and got a good audience, and found some good deals.”
In a couple of years time, Jeff ended up becoming one of the super angels when in 2007 he decided to raise one of the first ever micro VC funds in history closing $15M. He shared, “I wish I could say that I had this grand vision of completely revolutionizing the VC landscape but I didn’t. It was a demo fund. Things were working wonderfully as an angel, I made some really good investments and had a successful portfolio. But this notion of building this new kind of VC firm was very tempting and that was sort of my second startup.”
Making Crazy Bets
Like most investors, Jeff looks for fantastic founders who have a unique vision of the market opportunity they’re working on, a differentiated product that is 100x better than anything else that exists and a huge market opportunity. Additionally, Jeff also tries to see if he thinks the company can clear enough hurdles in 18-24 months to raise a Series A.
He adds, “I’ve been investing for 17 years. I have 200 investments under my belt but I think every investment is a new challenge. When I invested in Fitbit in 2008, wearables and wellness services were not a thing. When we invested in Sendgrid in 2009, it was clear the company was offering a useful service in increasing email deliverability but it wasn’t clear that it was going to be a $100M revenue company and it took 8 years to get to $100M in revenue. Yesterday, I was with the CTO of Postmates, where we were one of the very first large investors. We gave them enough money to close their last payroll before they could get their series A raised. We saved Postmates a couple of time in the early days. People said it was never going to work.”
Additionally, Jeff tries to see the world through the eyes of the founder and accumulate as much data as he can. But he also admits that the sad truth about VC funds is that only 10-15% of the companies in a fund matter in terms of performance because those are the ones that will return half to the entirety of the fund.
Jeff loves his job as a venture capital investor because everyday he gets the chance to meet founders who tell him about their business and vision. More recently in their latest fund, Jeff and his team have started looking into frontier tech.
He added, “I get to look at AI, VR, AR, robotics, space tech. dude, this is freakin incredible. I turn 50 this year, and I have another 10 years to leave my mark and I really want to support companies that will make an impact in the world.”
Jeff shares an example of a recent investment he made that he believes will change the lives of future generations called Molekule, the world’s first molecular air purifier, breaking down harmful microscopic pollutants like allergens, bacteria, viruses and other airborne chemicals.
Advice to Young People
When asked what his advice would be to young people interested in tech and startups, he shared, “Well, I think it’s awesome if you’re really keen on startups. Understand that you really should only start something if you have a burning desire to spend the next 5-10 years on it and if you can’t get it out of your head. Doing startups because it’s cool is the wrong reason to do it. If not, go spend some time with established companies like Google and then work for younger startups as an early employee then when you have this idea that you can’t get out of your head, go and start something.”
You can learn more about Uncork Capital here.
About the Author: David is a senior at Penn studying Cognitive Science and Computer Science, originally from the Philippines. At Penn, he’s heavily involved in the startup scene as an investment partner at Dorm Room Fund. Currently, he’s working on SkillStackers, the easiest way to scale work using a virtual workforce. Previously, he started a nonprofit organization called YouthHack which has gone on to scale to do programs in over 8 countries in the last 3 years. David enjoys meeting new people and sharing the stories of exceptional entrepreneurs!