Sep 7, 2015 · 26m · 20vc
20 VC 069: Jeff Clavier, King of Seed Funding @ SoftTech VC on Brad Feld, Fitbit and Standout Startups
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews SoftTech VC founder Jeff Clavier about his pioneering career in seed investing, early bets like Fitbit, and tactical advice for founders navigating micro VC fundraising.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 16.6% of the talking time here. How this is scored →
Harry as informed peer 2.3 Guest teaching 2.6 Guest disagreement 1.0 Harry pushing back 0.7
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:13 Clarifying Sarah Lacy's quote on seed round sizes
Jeff explicitly identifies and counters an industry quote attributed to Sarah Lacy claiming he forces startups into overly large seed rounds, calling it 'sort of true and not true'.
Hardest push from Harry ▶ 15:13 Questioning oversized seed round recommendationsHarry pushes back on Jeff's investment strategy by bringing up explicit criticism that SoftTech encourages startups to raise larger seed rounds than they actually need.
Biggest teaching moment ▶ 11:03 Explaining the 10x explosion of micro VC fundsJeff educates the host on the macro VC ecosystem, pointing out that clutter exists equally on the investor side due to micro VC funds growing from 25 to 250 in five years.
Harry holds his own ▶ 15:13 Citing industry critiques on capital raise strategyHarry demonstrates informed industry knowledge by bringing up specific commentary surrounding SoftTech's seed round sizing philosophy.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Jeff Clavier's Path into Venture Capital | 3 | 2 | 0 | 0 | Harry sets good context by referencing Brad Feld's previous podcast appearance and asking about hardware investing when it was considered a 'no-go zone' in 2008. Jeff explains his background and capital efficiency thesis behind early-stage hardware. | |
| Convincing Brad Feld to Lead Fitbit's Series A | 2 | 2 | 1 | 0 | Harry asks a lighthearted follow-up about whether Brad Feld bought Jeff a bottle of wine or present after the IPO. Jeff politely reframes the question, focusing instead on Brad's immense value on Fitbit's board. | |
| How Startups Can Stand Out to Micro VCs | 2 | 3 | 1 | 0 | When asked how startups can stand out among deal clutter, Jeff reframes the question by highlighting clutter on the investor side, noting that micro VC funds expanded tenfold from 25 to 250 firms. | |
| Seed Round Size and Runway Requirements | 4 | 4 | 3 | 4 | Harry directly challenges Jeff with an industry criticism regarding SoftTech pushing founders to raise larger seed rounds than necessary. Jeff recognizes the quote source (Sarah Lacy) and defends his 18-month runway policy based on Series A milestone requirements. | |
| Series A Fundraising and Preemptive Term Sheets | 2 | 3 | 1 | 1 | Harry asks about SoftTech's role in guiding follow-on rounds. Jeff details their active co-investing guidance and explains how preemptive term sheets have shifted from bargain hunting to avoiding competitive bidding wars. | |
| Co-Investor Dynamics and Retrospective VC Regrets | 2 | 3 | 1 | 0 | Harry asks about co-investor dynamics, leading Jeff to outline conflict checking in market mapping and recount how major VCs who rejected Fitbit's early rounds now lament missing out on a $10B outcome. | |
| Quick Fire Round with Jeff Clavier | 1 | 1 | 0 | 0 | Standard friendly quick-fire round covering books, advice, VC motivations, and a teaser about an unannounced investment in MIT wireless charging technology. |
Statements from this episode (12)
Clavier: Hardware Startups Were a "No-Go Zone" for VCs in 2008
“It was a no-no or no-go or no investment zone for the other VCs.”
Clavier: Fitbit Would Have Died Without Brad Feld's Series A Investment
“Every single round of financing was either close to impossible, To raise, I had to beg Brad failed to invest in the Series A saving Fitbit, because without that investment from Brad, they would be dead, and even the Series B or the Series C were not easy, desp…”
Clavier: No VCs Were Willing to Fund Fitbit in 2010
“In 2000 10 there was basically no one to fund Fitbit, like no one would touch it despite the early progress and, you know, sort of early liftoff in terms of sales”
SoftTech VC Doubled Down on Fitbit's $9M Series A Across Two Funds
“After a couple of months of due diligence and reference checks and spending time with the team, they led a nine million dollar Series A that I we participated into, and we actually bought more shares of Fitbit from our other fund, Fund Three, which we had rais…”
Clavier: Micro VC Market Grew to 250 Funds and $4B by 2015
“By 2010, you were looking at a market of 20, 25 in sort of institutional micro VC funds. In five years, 10 X that amount has been raised. So we're now looking at 250 macro VC funds having raised a total of four billion dollars.”
SoftTech VC Reviews 3,000 Startup Pitches Annually to Make 15 Investments
“We get to see about 3000 or more companies per year, and we only invest in 15.”
Clavier: Startups Need 18 Months of Seed Runway to Reach Series A
“We've always sort of looked at a, an average of an 18 months runway as what it takes for a company to, you know, take the seed round, hire a few engineers, get the product to market, start building traction, do a few, you know, revisions of the product, and th…”
Clavier: Hardware Startups Need $3M-$4M Seed Rounds Due to Longer Timelines
“Most of our companies will, you know, go out and raise a two million dollar seed round on average Unless, you know, they're a hardware company, in which case, they might go and raise a three to four million dollar listed round, because hardware is so hard and …”
Clavier: One-Third of SoftTech Portfolio Companies Receive Preemptive Series A Offers
“The thing which is interesting is that about a third Of our companies actually don't go and raise a round. The round just comes to them in the form of a preemption.”
Clavier: Preemptive Term Sheets Now Avoid Bidding Wars, Not Bargain Valuations
“And it used to be that preemptions were a way to try and get a sweet deal, so not pay market price, whereas now it's to try and get out of bidding wars that end up happening if ever you have an interesting company that is raising through a process where you co…”
Clavier: Fitbit Reached a $10B Valuation on Just $40M-$50M in Equity
“In the case of Fitbit, they've gotten to where they are just using, you know, roughly 50, you know, 40, fifty million dollars in in actual sort of equity capital.”
Clavier in 2015: Ambient Wireless Power Will Recharge Electronics by 2018
“So those two guys out of MIT have invented a well using a technology which has been refined lab at MIT, where, you know, in three years from now, you'll have a device or earlier You will have a device on your nightstand or your desk in the office that will aut…”