Month: September 2014

Recently, I penned a few notes regarding recent exponential rise of “Micro-VC” (loosely defined as firms that raise sub-$50MM-$100MM funds to invest in seed stage companies). According to CB Insights, at least 135 firms such firms exist today! Jeff Clavier, founder of SoftTech VC is without a doubt a pioneer in the institutional seed investing space. The SoftTech team has made over 150 investments since inception (including companies such as Mint, Fitbit, Wildfire, and Brightroll) and recently closed their 4th fund with $85MM in capital commitments. Personally, I’m a big fan of Jeff and the SoftTech story and he was gracious enough to share with us his unique perspective on the ever-evolving seed stage financing market. As a first generation “Micro-VC”, you have seen the evolution of the seed-stage market first hand over the last decade. Can you give us some background into your journey? When I started full-time angel investing in 2004, things were certainly very different than they are now. Back then, seed rounds were smaller, and typically took many angels to fill up, most of whom were brought into deals based on whom they knew rather than the relevant experience and value they brought to companies. Party rounds, which I think are terrible, were certainly the standard. Some full time angel investors like me became known as “Super Angels”. Some of the most successful investors within this group then began to raise formal venture vehicles and became the first generation of what we now call Micro-VC’s. It was actually a small group up until the last 2-3 years, when an influx of supply (new fund managers) and demand (from limited partners) created the current explosion we’re seeing within Micro-VC. Not surprisingly, I now often meet people who either want to be entrepreneurs or VCs, and sometimes both. The explosion of funding opportunities certainly provides entrepreneurs with more choices. In addition, the reduced barriers to entry have allowed some talented young investors start their own firms, many of which bring a fresh perspective to start-ups. With the explosion of Micro-VC funds and the availability of other retail financing solutions, capital seems to have become a commodity, and not a particular scarce one. How has SoftTech become a desirable capital source for entrepreneurs? Yes, capital is definitely a commodity at the seed stage. The best companies and entrepreneurs will have no problem raising given the number of seed investors, retail and institutional. Adding value through relevant connections, sector expertise, and operating experience is paramount today. We are fortunate to have become one of the established seed stage venture brands and our pitch is simple. We have demonstrated success in helping over 150 companies develop...

  New start-up formation has happened at breakneck speeds over the past few years, thanks in no small part of course to game changing advances in technology and early stage financing, (Amazon Web Services, open source computing, Micro-VC, etc.).  And these shifts have given rise to massive innovation across a variety of sectors. One area that’s particularly interesting is the burgeoning urban innovation sector.Tumml is an accelerator program based out of San Francisco that provides financing and mentorship to companies of a very specific type – ones that develop solutions around urban impact. Said another way, these are companies that are introducing technology based solutions to solve real urban area problems. And unsurprisingly, it’s a sector that venture firms are taking notice to. After all, these are companies addressing major pain points in large and expanding markets. The following is a transcript of an interview we conducting with the founding team at Tumml, Clara Brenner and Julie Lein. It’s a great read as it provides insight on how technology has and will continue to drive urban innovation in major cities all over the world. Can you please tell us about Tumml and the inspiration around starting it? Julie: Tumml is a non-profit urban ventures accelerator with the mission of empowering entrepreneurs to solve urban problems. We’re here to support the next generation Revolution Foods and Zipcars – companies developing consumer and business-facing products and service that solve community problems in cities. Going back several years, Clara and I met when we were at grad school at MIT Sloan and discovered that we both shared similar perspectives on what we’re now calling the “urban impact” Space. Clara had previously worked in real estate and sustainability, and I have a background in local politics and governance. We both cared a lot about the future of our cities and believed startups had an important role to play in making them better – because they are nimble and super scalable, and they are attuned to the needs of their customers (i.e. themselves, as well as their neighbors, friends, family, etc). But we didn’t see many entrepreneurs starting companies in this space. As we started researching this issue more, we found that there are two distinct barriers in the urban innovation space: Funding and Mentorship. So we decided to start Tumml around our personal passion for urban innovation and to address the two major gaps in the market. Now that you’ve spent a few years providing mentorship and assistance to startups centered within the urban Innovation space, what are the 2-3 dominant themes that you’ve seen emerge in this sector? Clara: There are urban innovators working on a wide range of verticals, but...