Sam Chaudhary, 26 & Liam Don, 26 from Class Dojo (Forbes ’30 Under 30′, Education)

Class Dojo founders Sam Chaudhary and Liam Don as disrupting the classroom with their classroom management software that enables teachers to track good and bad student behavior. Since launching in 2011, six million teachers and students use Class Dojo on their smartphones, tablets, and the web to dramatically improve classroom culture and increase educational productivity.

Carly Gloge, 28 and Isaac Squires,29, from Ubooly (Forbes ’30 Under 30′, Games & Apps) Carly Gloge and Isaac Squires are the brains and games behind Ubooly, a iPhone/iPod Touch ... Read more »]]> Forbes released its annual ‘30 Under 30‘ list of disrupters, innovators and entrepreneurs – and we’re proud to see many of SoftTech’s rising stars represented.  Meet the SoftTech VC founders that made the list and a BIG congrats to Sam, Liam, Carly, Isaac, Zain, Stephen, and Alex!

Sam Chaudhary, 26 & Liam Don, 26 from Class Dojo (Forbes ’30 Under 30′, Education)

Class Dojo founders Sam Chaudhary and Liam Don as disrupting the classroom with their classroom management software that enables teachers to track good and bad student behavior. Since launching in 2011, six million teachers and students use Class Dojo on their smartphones, tablets, and the web to dramatically improve classroom culture and increase educational productivity.

Carly Gloge, 28 and Isaac Squires,29, from Ubooly (Forbes ’30 Under 30′, Games & Apps)
Carly Gloge and Isaac Squires are the brains and games behind Ubooly, a iPhone/iPod Touch powered “Smart Toy” Toy tells stories & jokes, plays games & music, and takes kids on imagination adventures. Cuddly Ubooly’s been busy this holiday season, traveling from its hometown in Boulder to make appearances on the Today Show in New York and at LeWeb in Paris.

Zain Jaffer, 24 from Vungle (Forbes ’30 Under 30′, Games & Apps)

Zain Jaffer and his co-founder Jack Smith launched Vungle to help mobile application developers promote and monetize their apps through in-app video trailers. Launched in June, Vungle already reaches 50M+ people per month, and is working with Amazon, Hotels.com and Priceline.

Stephen Espinosa, 25, from AppStack (Forbes ’30 Under 30′, Games & Apps)

AppStack creates mobile websites and mobile ads to get small-medium sized businesses more customers – it’s the top mobile ad reseller of Google ads and employs a team of 45.

Alex White, 26, from Next Big Sound (Forbes ’30 Under 30′, Music)

Alex White’s Next Big Sound is big data for the music industry. By measuring daily music consumption and purchase decisions, Next Big Sound combines artist activity with context to help the modern music industry make decisions.

That’s why today Charles and I are thrilled to share an exciting piece of news: Steph’s promotion to Principal. Join us in wishing her well! And follow Steph on Twitter at @stephpalmeri.

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)

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.

  The diagram on the right summarizes these 5 core "buckets", in which we have develop a prior expertise and track record – either by ... Read more »]]> Investing in, and working with, great entrepreneurs at the very early stage of development of their companies is what we do, first and foremost. For over 3 years now, our focus has been the consumer Internet space (now dubbed "Web 2.0") and we plan to continue doing so for the foreseeable future. By investing in 20+ Web 2.0 startups, we have learned a lot about this still developing market, that has helped us refine our strategy and the segments (we call them "buckets") that we are interested in. However, like any investor, we will remain opportunistic and we’ll do a few deals that are outside of our area of expertise – just because we like the team, the opportunity and we feel that it is worth the risk.

  The diagram on the right summarizes these 5 core "buckets", in which we have develop a prior expertise and track record – either by investing or taking companies all the way through to exits.
The "New" bucket is there because we want to be honest about the fact that we will enter new areas that might become one of the core buckets in the future.

Early stage technology investing is an art, not a science, and it is therefore difficult to list explicit criteria, metrics and thresholds. We can however provide a list of data points regarding our overall strategy for the fund:
•    invest in 30 to 40 seed stage startups
•    average “bite size” of $250K, ranging from $100K to $500K
•    able to lead, co-lead or follow other firms or angel syndicates
•    focusing on consumer Internet, but with a great flexibility to enter new sectors opportunistically
•    open to a few non Silicon Valley deals
•    capital efficiency, great teams, differentiated ideas and flexibility on “how big it can become” will be common characteristics shared by the companies we invest in
•    working hand in hand with the best firms in Silicon Valley, and the usual suspects in the acquisition gang, to build a successful outcome for everyone involved

Jeff Clavier’s Bio

Based in Palo Alto, California, Jean-Francois “Jeff” Clavier is the Founder and Managing Partner of SoftTech VC, one of the most active seed stage investors in Web 2.0 startups. Since 2004, Jeff has invested in more than 20 consumer Internet companies developing new concepts (such as social media) or revisiting “old” ideas with a new set of economics and technologies. In 2007, Jeff was recognized as one of the 13 “Web 2.0 King Makers” by Business 2.0, and is often noted for his investments in categories such as “passion-centric communities,” or for having already sold ... Read more »]]> SoftTech VC is an early stage venture capital firm that most recently formed a $12M seed stage fund, SoftTech VC II. Jeff Clavier, one of the most active Web 2.0 angel investors, announced the fund and its four initial investments,  at the TechCrunch40 conference in September 2007. SoftTech VC II is backed by a mix of institutional  and private investors.

Jeff Clavier’s Bio

Based in Palo Alto, California, Jean-Francois “Jeff” Clavier is the Founder and Managing Partner of SoftTech VC, one of the most active seed stage investors in Web 2.0 startups. Since 2004, Jeff has invested in more than 20 consumer Internet companies developing new concepts (such as social media) or revisiting “old” ideas with a new set of economics and technologies. In 2007, Jeff was recognized as one of the 13 “Web 2.0 King Makers” by Business 2.0, and is often noted for his investments in categories such as “passion-centric communities,” or for having already sold five of his companies in the past two years through successful M&As. Jeff’s 19 years of operational, entrepreneurial and venture capital experience enable him to add relevant perspective and value to the companies in which he invests.

Jeff’s initial investments were in the search, social media, online communities and application infrastructure sectors. Most recently, he added gaming and monetization to his investment focus, and he has been dabbling in Enterprise 2.0, system infrastructure and a few other emerging categories. Jeff invests primarily, but not exclusively, in Silicon Valley-based startups.
A popular speaker and moderator, Jeff participates in dozens of industry events throughout the year. These events range from local Silicon Valley panel discussions to international conferences, where he shares his passion for building Internet startups, angel and VC investing, innovation and entrepreneurship. Jeff has also produced a number of technology conferences and is a founding co-chair of the SDForum Search Special Interest Group.
Jeff’s blog, Software Only, was one of the early venture capital blogs, started in 2004, where he primarily covered social media, search, online communities and investing. After a few years of active posting, Jeff switched to micro-blogging, and a less time consuming production, using Twitter and Pownce.

Prior to founding SoftTech VC, Jeff spent more than 16 years in the enterprise software world as an entrepreneur, senior executive and venture capitalist. Throughout his career, he was exposed to global markets leading development teams in Europe and on Wall Street, designing products sold internationally and investing in software infrastructure startups across the U.S. and Europe.

In 2000, Jeff became President of RVC Capital, the firm managing the Reuters Greenhouse Fund with $600M invested in 82 companies, including Yahoo!, Verisign, Phone.com and Infoseek. He joined the venture arm of Reuters from the company’s product development division, where he was leading a 250+ staff in Paris, London and New York, and was responsible for the Risk Management and Desktop products.
Jeff joined Reuters through the acquisition of Effix Systems, a Paris-based startup company he helped develop in 1989 while still in school.

Jeff was born, raised and educated in France, earning a MS in Computer Science and a research degree in Distributed Computing. He has been happily living in Silicon Valley since 2000 with his wife Bernadette and their two children. When he is not busy working, Jeff likes to spend time with his family and friends, cook, collect wine and wander around Outland on his hunter. He also skies, hikes, dives and plays golf so poorly it is not even funny.

Updated: August 2007