We were extremely pleased to see porfolio companies Fab win Best Shopping Application, and Fotopedia win Best Tablet Application. Congratulations to our teams, who both saw an exploding growth this year.

I particularly appreciated the tribute to my friend Heather Harde, the former CEO of TechCrunch, who totally deserved her standing ovation. And the emotional moment of Fotopedia’s Jean-Marie Hulot who recalled that the last time he was in this venue, he was on stage with Steve Jobs to launch the NeXT  – but Steve was no more (JMH was the CTO of NeXT back in 1988, ... Read more »]]>  As it has been the tradition now for a few years, our industry gathered last night to celebrate the achievement of startups and founders at the Crunchies. In a choked full venue (and a completely saturated AT&T network because of the number of smartphones in the audience), we enjoyed a fast paced program going through 20 different categories.

We were extremely pleased to see porfolio companies Fab win Best Shopping Application, and Fotopedia win Best Tablet Application. Congratulations to our teams, who both saw an exploding growth this year.

I particularly appreciated the tribute to my friend Heather Harde, the former CEO of TechCrunch, who totally deserved her standing ovation. And the emotional moment of Fotopedia’s Jean-Marie Hulot who recalled that the last time he was in this venue, he was on stage with Steve Jobs to launch the NeXT  – but Steve was no more (JMH was the CTO of NeXT back in 1988, and then became CTO of Apple’s Application division).

Thanks again to TechCrunch, GigaOM and VentureBeat for keeping the tradition going. It would have been nice to have Mike Arrington in the audience, or somehow involved.

So why raise $55M, when our second fund was $15M? I learned a lot investing Fund II from 2007 to 2010, and figured that even for seed funds, outsized returns are generated by having the right level of ownership, and a meaningful level of follow-on participation, in your portfolio companies. We therefore upgraded our strategy from Access (“get in the good deals”) to Ownership (“buy/keep ... Read more »]]> All of us at SoftTech are super excited to share that we reached a critical milestone for our firm: we have wrapped up our third fund, SoftTech VC III. Back in January 2011 we announced Fund III, with an initial $35M target, then increased it to $50M and at investors’ demand, agreed to bump it up to $55M before closing it, oversubscribed. We can also – finally – talk about it since we’re no longer fund raising and aren’t subject to non-sollicitation restrictions any more – yeah!

So why raise $55M, when our second fund was $15M? I learned a lot investing Fund II from 2007 to 2010, and figured that even for seed funds, outsized returns are generated by having the right level of ownership, and a meaningful level of follow-on participation, in your portfolio companies. We therefore upgraded our strategy from Access (“get in the good deals”) to Ownership (“buy/keep enough of each company that any positive outcome is meaningful to the fund”).

We now have an initial bite size of $400K (sometimes a bit less, sometimes a lot more) and will selectively invest our pro-rata, or buy up, in follow-on rounds of  companies that are scaling well. Our roadmap is to invest in 60-ish deals over 3 years, and we are about 1/3 of the way there after one year of activity (23 deals since Fund III’s inception and already a number of follow-on’s). We will continue focusing on Silicon Valley, New-York, Boulder and SoCal – and will opportunistically invest in other geographies. Our key sectors are Mobile, Next-Generation E-Commerce and Cloud Services – but we’ll continue to be active in Monetization/Ad Network technology and Gaming as we always have.

I want to welcome, and thank, our brand new syndicate of institutional investors for backing us: Stepstone Group, affiliates of AMG National Trust Bank, Cendana Capital and Industry Ventures – as well a angel friends who joined us for the ride: Mitch Kapor, Steve Blank, Mike Arrington, Henri Moissinac, Geoff Ralston, Ben Smith, Oleg Tscheltzoff, Joshua Schachter, Loïc LeMeur… to name just a few. Several friends in the venture capital industry have also been more than generous with their time (and investor introductions) but I want to give a particular shout to Brad Feld (Foundry Group), Josh Kopelman (First Round) and Jon Callaghan (True) who have been mentors and supporters since the very early days of SoftTech.

Finally I want to add a personal thank you note to my kick-ass team: Steph, Ashley, and Charles. This would not have happened without you guys.

Related News
>> WSJ Blog: SoftTech VC Raises $55M Fund For Early Technology-Firm Investments
>> TechCrunch: Jeff Clavier’s SoftTech VC Raises $55 Million For Fund III
>> Fortune: Jeff Clavier Builds a Bigger Seed Fund
>> Forbes: SoftTech VC Closes Oversubscribed $55 Million Third Fund
>> GigaOM: How Jeff Clavier Will Spend SoftTech’s Biggest VC Fund Yet

PS: thanks to our portfolio company Visual.ly, here is an infographic that summarizes a lot of our activity.

If you follow me on Twitter/Google+, you might recall a post I wrote a couple of months ago (which generated a lot of great comments):

A very smart MBA (who just graduated) wrote me asking if there was a job opportunity at SoftTech VC. She really wants a job in venture apparently, which I can respect, but I really think that venture (aka “the dark side”) is a gig you do after accumulating operating experience. Here is what I wrote her:

“In any case, I don’t think that we ... Read more »]]> We’re super excited to announce that Stephanie (“Steph”) Palmeri has joined SoftTech VC as Senior Associate, a brand new position in our firm which has grown 400% since January 1^st. Steph is awesome: smart, workhorse, funny, New-Yorker, swear-proof, determined, Columbia MBA – in no particular order. And we can truly say that serendipity is responsible for that lucky find for us.

If you follow me on Twitter/Google+, you might recall a post I wrote a couple of months ago (which generated a lot of great comments):

A very smart MBA (who just graduated) wrote me asking if there was a job opportunity at SoftTech VC. She really wants a job in venture apparently, which I can respect, but I really think that venture (aka “the dark side”) is a gig you do after accumulating operating experience. Here is what I wrote her:

“In any case, I don’t think that we are going to be able to help: we are building the firm with Partner level investment professionals who have 12+ years of operating experience. We may at some point bring in a principal as well, but once again, we’d look at bringing in someone who has had at least 8 years of relevant operating experience. Why? Because you can’t really advise or provide perspective to a young CEO/founding team if you have not been exposed to “real life” yourself.

So what am I saying? That you should take that offer from <redacted> – they seem to see a rockstar in the making in you, and it is a great, promising company. And ask <redacted> to give you some exposure to the different facets of the business, and try to take on different challenges over the next few years.

If you really want to go for a venture role now, only sign up for a top firm. And after two years, cut yourself loose and join the most exciting portfolio company of theirs (or others) you have seen. You can’t really have a career in venture, you have to move in and out.

Sorry if it is not what you wanted to hear, but I’d hate you end up in venture too early – when it is not the most fun and rewarding.”

Yes, that gal I was referring to was Steph. Read on.

I figured in the first five minutes of our discussion that I was wasting my time (and hers) trying to dissuade her from joining a VC firm. Despite having opportunities in the New York scene, she had packed her stuff and was crashing with friends in the Valley determined to find a VC gig here. With almost 10 years in operating experience in Marketing and consulting roles (something Steph almost neglected to “sell” in her email intro to me), and a real passion for the investment side, I thought that she’d have a very decent shot despite the “local” competition.

Mind you, the venture world desperately needs more women – especially for those of us investing in Consumer Internet where a majority of the traffic and revenues is generated by… yes, women and investment decisions are mostly made by a bunch of dudes. And it had always been my intention to fix that flaw upon finding the right person/fit for us.

We had originally built SoftTech as a “Partner-only” firm, where each investment professional would have seen “enough” of the entrepreneur/executive side that they could use their better judgment and personal screw-ups to support portfolio company challenges and opportunities. There are limitations to that model, ones that Charles and I were definitely feeling (with 200 to 300 opportunities hitting our inbox a month). When a model shows its limits, you change it – and that’s we did by offering Steph to join us for an “experiment” (the VC equivalent of basic training).

We told Steph that she would have about 10 weeks to demonstrate to us that we needed someone to come in and help us working on our inbound dealflow, getting involved in due diligence checks and models, doing more proactive research on areas of potential interest, etc. And I think that it is fair to say that we kept Steph really busy – asking her to cover a wide array of things so she could get an acute feel of what her job would be, and we could see how she was doing. A reciprocal “try before you buy” of sort that she accepted without blinking.

Long story short: after 5 weeks, a ton of work and a number of very positive reference checks, Charles and I caucused one last time, and agreed to terminate the “experiment” to offer Steph a full time role of Senior Associate. And obviously we are super stoked that she instantly accepted!

Steph will work with us on opportunity reviews, due diligence, market analysis and dealflow management – to start with. Not bad for someone who I wanted to dissuade joining the venture world, uh?

You can follow Steph on Twitter at @stephpalmeri or on 280 in her red Mini. And join Charles, Ashley and I in welcoming her to the dark side!

I believe that the term “Super Angel” was used for the first time in the Startup Visa act. It defines the Super Angel as “an angel investor that has a track record of regularly participating in seed round investments” for the purpose of the startup visa proposal. So the term was coined sometime in 2009 by someone involved in preparing the act – Brad Feld, Dave McClure, Manu Kumar, etc.The term was then extracted out of this context by the media to refer to us, the 15 or so firms investing in the early stage space. It is a total misnomer since we’re all all VCs: we manage OPM (Other People’s Money), and as such micro-vc or seed fund is really what defines us. But the ... Read more »]]> Yesterday I saw this question on Quora: When did the term Super Angel first come into use? and couldn’t help but adding my own 2 cents.

I believe that the term “Super Angel” was used for the first time in the Startup Visa act. It defines the Super Angel as “an angel investor that has a track record of regularly participating in seed round investments” for the purpose of the startup visa proposal. So the term was coined sometime in 2009 by someone involved in preparing the act – Brad Feld, Dave McClure, Manu Kumar, etc.The term was then extracted out of this context by the media to refer to us, the 15 or so firms investing in the early stage space. It is a total misnomer since we’re all all VCs: we manage OPM (Other People’s Money), and as such micro-vc or seed fund is really what defines us. But the “Super Angel” term is sticky – to say the least.

As an aside, the Quora team should make it easy for blogger types to syndicate their answer on their own site. Yet another free distribution channel.

Photo Credit: Rachel Titiriga (Flickr)

Congratulations for their nominations:

Thank you, and see you on Friday! Very excited to see that ELEW is going to play.

PS: And yes, we’re thrilled of the nomination to “Best Angel” again this year!

After three and a half years of angel investing, building Fund I's portfolio, I had the opportunity to raise my first "real" fund, SoftTech VC II, with a view to figure out the institutional incarnation of my angel investment strategy. Low startup costs, including development, marketing and distribution, had changed the nature of the investing business: the cost of ... Read more »]]> Almost seven years ago, in May 2004, I started SoftTech VC with a goal to get involved in a number of startups that were defining the "New" consumer internet space. Hustling my way into the first few deals I closed as an angel, I was lucky to meet amazing investors like Josh Kopelman, Brad Feld, David Hornik, Reid Hoffman and Jon Callaghan who generously shared their experience, wisdom and started working with me. To this day they have remained fantastic friends and relentless supporters, and I want to acknowledge their contribution to SoftTech VC over the years.

After three and a half years of angel investing, building Fund I's portfolio, I had the opportunity to raise my first "real" fund, SoftTech VC II, with a view to figure out the institutional incarnation of my angel investment strategy. Low startup costs, including development, marketing and distribution, had changed the nature of the investing business: the cost of failure had gotten so low that seed capital was becoming a quasi-commodity. All Benjamins being equal the differentiation amongst investors is the quality of their support, the actionability of their network, and the efficiency by which they can deploy their resources on behalf of their companies. For the duration of Fund II, I had elected to run SoftTech lean and mean, with just myself in the firm and an awesome outsourced back-office team (big shout out to Dom Turiano and Joe Pruscino at VMS). Why? Because I wanted to be able to develop, evolve and even – eeeeww – pivot the model by which I was operating in quasi realtime to respond to market and portfolio demands.

As I am turning the corner of Fund II, I am also confident that the model established over the past 80+ investments can scale and it is now time to beef up SoftTech VC resources by bringing top talent on board, allowing us to better serve our portfolio companies, present and future.

First, I am very excited to welcome Charles Hudson as a Venture Partner. I have known Charles for almost 9 years, from his days at In-Q-Tel, and we have kept in touch as he went through Google, Gaia Online, Serious Business and built from the ground up the awesome Social Gaming Summit series of conferences that he successfully sold last year. As I started thinking about bringing people on board to scale the SoftTech partnership, Charles was one of my very first calls. The big question when you get the call from the Dark Side is whether you are going to like the very particular job VCs have, and whether now is the right time to make that transition.

Charles has spent enough time around the VC world that he knows what to expect. We had very open discussion about the fact that he did feel he had one more startup "in him", and he went on to co-found Bionic Panda, a very cool mobile gaming company.  My good friends, and numerous times co-investors, at True Ventures have established an interesting model allowing Tony Conrad and Toni Schneider to be both Partners in the firm, and CEOs of their respective companies. As I have worked closely with these two fine gentlemen on some of our mutual companies, I have seen first hand that the model works. That inspired me to offer the same opportunity to Charles: join me as a Venture Partner, who will make investments on our behalf with an initial focus on the gaming and mobile sectors, at the same time he develops his own startup. Not so many individuals would be able jump into two very demanding gigs at the same time, but Charles is definitely one of them – as anyone who has worked closely with him in the past will attest. Charles is also recognized as a top business development talent in the Valley, and he will be supporting our portfolio companies in that critical function. So from now on, I'll proudly refer to "my Partner Charles Hudson".

Second, no VC organization would succeed without amazing executive admins who work in the background to make sure that everything runs smoothly. I have finally found the one for me – thanks to Carly Spoljaric, Rob Hayes' very own EA at First Round Capital. I was thrilled to see Ashley Cravens join SoftTech last Monday, as my Executive Assistant. A warm welcome to Ashley who just relocated from Portland, Oregon to the Bay Area.

For the very first time, it makes sense that our Bios page is titled "About Us".

I am speaking at one or two events a week, and I am seeing that pile-up all the time. It takes me anywhere from 10 to 40 mins to get off stage or "free myself up". Once it took me over an hour to leave the room – at a TiE Conference a couple of years ago.

I consider it part of the job to meet people in the hallway, and so I try to be as efficient but gracious as possible. A sixty second pitch, a couple of short Q&As followed by "Can we continue the discussion by email?" are fine since I will typically be able to indicate whether I am interested in following up, ... Read more »]]> My friend Fred Wilson wrote a post this morning about the looong queues of people speakers face after panels or talks we give at conferences: The Panel Pile-Up. This post is actually an edit of the comment I left on Fred's blog.

I am speaking at one or two events a week, and I am seeing that pile-up all the time. It takes me anywhere from 10 to 40 mins to get off stage or "free myself up". Once it took me over an hour to leave the room – at a TiE Conference a couple of years ago.

I consider it part of the job to meet people in the hallway, and so I try to be as efficient but gracious as possible. A sixty second pitch, a couple of short Q&As followed by "Can we continue the discussion by email?" are fine since I will typically be able to indicate whether I am interested in following up, or not.

It is also completely fine to introduce yourself and just mention that you will forward a plan through a mutual connection. Putting a name on a face and shaking hands is always nice.

I always carry business cards, and happily give them away when asked. Why? Because it is the most efficient way of moving to the next person! Otherwise I need to spell my email address j-e-f-f (like Franck)<dot>s-o-f-t-t (yes, two t's) e-c-h-v-c (yes, vc like venture capital)<dot>com. If you compound the ambient noise, and the French accent, it would take me way more time than handing over a business card.

Very often, people will ask if I can meet them to give them feedback ("someone" said "If you want money, ask for advice"). And despite really enjoying doing it, but I am really short on time. So getting such a meeting organized through a trusted connection, like the funding pitch meeting, is often mandatory.

What's not OK is "hogging the line", and not understanding that 2 minutes is really the maximum you have keep a conversation going, out of courtesy for the other people going. Or trying to convince me to invest – right there and then, whereas the only reasonable expectation is to be invited into a meeting to pitch your idea. Other favorites (not) are asking me "if I invest in consumer internet", "if I invest at the early stage", or "what I invest in". If I have been on stage, I have most likely introduced myself and explained all that. 

As Jason Calacanis commented on the post, no entrepreneur should randomly pitch an investor without knowing the space, the stage and the context in which he/she invests in. Jeff Bussgang also made a very good point: we don't have the same level of expectations with students – when I hang out at University conferences, and after class when I speak/attend courses, I am perfectly happy to answer even the most basic questions, that's what we are here for.

Dan Primack asked a question in today's PE Hub Wire: out of the thousands of people who have pitched us at conferences after a talk, how many have we invested in. You might have guessed the answer: zero. It is as rare as investing in a business plan received via a "cold email" on our business plan email address. 

But I do believe in the value of serendipity: you never know where your next deal is going to come from. I can say that I met the founders of Userplane (Mike Jones, we sold the company to AOL and he is now CEO of MySpace) and Buzznet (now BuzzMedia, a 50M+ u/v's network of web sites in the entertainment space) at a conference speakers dinner 6 years ago. So here you go: it's worth it .

A few of my friends wrote Dan about their experience: three of them met a company they ended up investing in after a panel.

Fast forward to today, 1pm-ish: I was walking over to grab lunch at Pluto’s, also across from the Apple Store. And guess who was there, waiting first in line for his iPad this time . Ton of hype around this launch, sure! Some rain too, which sucks for the few people who are now waiting for the opening of the store tomorrow at 9am, when they start selling the much expected device.

Me? I am super excited, and will be at the Store around 11am tomorrow to grab the iPad I have reserved the day it came on pre-sale. And I am certain that ... Read more »]]> Almost three years ago, I was driving up University Avenue and stopped to grab a coffee at the Peet’s Coffee across the Palo Alto store. It was 9AM and Robert Scoble and his son Patrick had just arrived to wait in line for their iPhones (as memorized by this post). They waited 33 hours.

Fast forward to today, 1pm-ish: I was walking over to grab lunch at Pluto’s, also across from the Apple Store. And guess who was there, waiting first in line for his iPad this time . Ton of hype around this launch, sure! Some rain too, which sucks for the few people who are now waiting for the opening of the store tomorrow at 9am, when they start selling the much expected device.

Me? I am super excited, and will be at the Store around 11am tomorrow to grab the iPad I have reserved the day it came on pre-sale. And I am certain that it will become the 3rd device, between my phone(s) and my laptops(s), that I will be carrying around the house and some of my trips.

I am also extremely bullish for the iPad as a gaming platform, and two games developed by cos of mine have just made TechCrunch’s list of best iPad applications: Tap Tap Radiation and Red Fish (respectively from Tapulous and FreshPlanet, which we just decloaked around this launch).

Tags: ipad, robertscoble

For a recession year, 2009 was not all that bad: SoftTech VC II closed 15+ new investments, a number of our companies raised additional financing from great VC firms (Eventbrite, Curse, Outright, Blekko,…) and we even enjoyed a few nice exits (Ohloh, Mint, Mixer Labs,…). I am also honored to be a finalist for Best Angel investor at the Crunchies, and I am really excited about the prospects of the companies I invest in for 2010. But that’s not what I want to focus this post on.

I want to tell you a mundane, yet very important story about the power of social media, and how our kids can actually help make the world a better place. A few months ago, my wife Bernadette saw a tweet from ... Read more »]]> I want to take the opportunity of this second blog post of the year (!) to wish you and your families Happy Holidays and a Happy, Healthy and Wonderful New Year.

For a recession year, 2009 was not all that bad: SoftTech VC II closed 15+ new investments, a number of our companies raised additional financing from great VC firms (Eventbrite, Curse, Outright, Blekko,…) and we even enjoyed a few nice exits (Ohloh, Mint, Mixer Labs,…). I am also honored to be a finalist for Best Angel investor at the Crunchies, and I am really excited about the prospects of the companies I invest in for 2010. But that’s not what I want to focus this post on.

I want to tell you a mundane, yet very important story about the power of social media, and how our kids can actually help make the world a better place. A few months ago, my wife Bernadette saw a tweet from a Stanford professor mentioning how powerful this video from Charity Water was. She decided to show it to our kids, and our daughter Jade – who had her 9th birthday coming up a couple of months later – decided instantly to forego her birthday presents and ask the friends she would invite to her birthday party to contribute to her Charity Water campaign.

What resonated with Jade most was to fill up a glass of water, put some mud in it, and realize that kids in Africa have to drink that muddy water – instead of the clean water that she is taking for granted. The initial goal of the campaign was to raise $200 – just from the friends who joined her birthday party. And that initial goal was fulfilled. We had said that Bernadette and I would match what Jade would raise by herself, and as of today, we have lined up $398 – which was great. But it was not enough, we felt we needed to do more.

Building a well costs $5,000, and that well can serve the needs of a local community in Africa, or other parts of the world that don’t have the luxury of clean water. A donation of $20 can also serve the needs of a kid for 20 years, so do the maths: $5,000 will help 250 kids with their needs for 20 years.

Jade’s wish for this Christmas is that we help fund a well. Bernadette and I will match the first $2,500 contributing to that goal. So if you – like us – find that this is an important cause to support, please help spreading the word or consider donating to Jade’s wish.

Happy Holidays, and thank you.

Tags: charitywater

I met Aaron in July 2006, thanks to the introduction of Sanford Barr (Aaron owes you a big one man , and I was impressed by his determination and ambitions, and promptly decided to invest in the Seed round eventually led by my good friends of First Round Capital. After building its product for over a year, Mint launched at TechCrunch40 in Sept. 2007 (and won the $50,000 prize). And from thereon, it developed a fantastic service, adding 1.4M users, and this morning, announced that Intuit had agreed to acquire the company ... Read more »]]> I have made no mystery over the years that out of the 65 companies I have invested in over the past 5 years, Mint and its CEO Aaron Patzer, was one of the most exciting. It definitely met the “3-asses” rule: a young, brilliant, kick-ass CEO (Aaron), a big-ass, phenomenal, market (personal finance) and a smart-ass product (mint.com).

I met Aaron in July 2006, thanks to the introduction of Sanford Barr (Aaron owes you a big one man , and I was impressed by his determination and ambitions, and promptly decided to invest in the Seed round eventually led by my good friends of First Round Capital. After building its product for over a year, Mint launched at TechCrunch40 in Sept. 2007 (and won the $50,000 prize). And from thereon, it developed a fantastic service, adding 1.4M users, and this morning, announced that Intuit had agreed to acquire the company for $170M in cash.

Aaron was just on stage at the TechCrunch50 conference, two years later, to confirm the “rumor”. Aaron will run Quicken Online and Quicken Desktop over at Intuit. He also wrote a great guest post on TechCrunch, relating to some of the fundamentals of building Mint.

Huge congratulations (and thanks!) to Aaron, the entire Mint team and all my fellow co-investors for this fantastic success. Exiting at $170M in this environment is no small feat.

Rob Hayes has a great post on the history of Mint, which he witnessed, and contributed to, as a board member since the Seed round. And yes, Mintuit was an easy one. The New York Times also wrote about the acquisition here and here. Josh Kopelman points out that Aaron (Patzer) always preaches fiscal discipline, he’s now a member of the First Round Capital “blank check club” — and should he ever start another company, he can come to us to claim it , and I’ll offer the same!

Tags: intuit, mint