“It’s actually not about the money, it’s about the advice, connections, experience, expertise, and track record.” — Jeff Clavier
As an angel investor, the value you provide to early-stage companies extends outside of the checks you write. With thousands of competing angels and firms trying to get into the same attractive deals, you have to define and showcase your value to stand out. “What will get entrepreneurs to come and seek your capital, because there is so much capital that it’s actually not about the money,” says Jeff Clavier, Founder and Managing Partner of Uncork Capital. “Figure out what your shtick is because being a broad-based firm is very challenging in this environment.”
By honing in on your area of expertise, developing a deep pool of resources, and building a strong network, founders will immediately understand the impact you can have on their company, allowing you access to deals you wouldn’t have otherwise.
Jeff speaks with Cory Levy on this week’s episode of the Spearhead Podcast. Jeff has led Uncork, a seed stage venture capital firm, through more than 200 deals over the past 15 years, including investments in Fitbit, SendGrid, Mint, and Postmates.
Like every investor, Jeff has also passed on opportunities to invest in startups that are now tech giants. Cory asks, “If you could go back to yourself 18 years ago when you were just starting out investing, what would you tell your younger self?” Jeff says that there are only two things he would change. “Don’t pass on LinkedIn, don’t pass on Uber. That’s it.”
When passing on LinkedIn, Jeff doubted their ability to raise a Series B without a business model instead of putting his faith in Founder Reid Hoffman. No longer relying solely on the likelihood of success, Jeff now trusts strong teams. “If I believe that the team can actually pull it off, even in the face of low probability, I will go for it,” Jeff says.
At the beginning of Uncork, Jeff was responsible for making every deal. If he believed a deal was worth making, he wrote a check. Today, he’s surrounded by a team of investors who all have strong opinions, which he considers to be an asset even if there are disagreements.
“You have to have pushback. We’ve had contentious decisions at Uncork, where one of us was intimately convinced that the company that he or she was pitching was a good one and the others were like, ‘Don’t like it, don’t agree, whatever.’ Ultimately, if one of us has an absolute conviction that we should do this deal, then we’ll probably do it, unless we have data points or intimate knowledge or experience that disproves it.”
When it does come time to say no, Jeff and the Uncork Capital team won’t make introductions to other VC and angel firms. Jeff believes this decision is in the best interest of the founders.
“The thing which we don’t do to help is introduce someone we pass on to other investors because, by definition, if I introduce someone I just said no to another investor saying, “Hey, I just passed, but they want to meet you,” then, instantly, I kill the deal because in the mind of my buddy who I made the introduction to, I’m passing, and that’s a super negative signal.”
In the early 2000’s, Jeff built an audience by starting one of the first VC blogs. “When you only had a handful of people blogging about an important subject like entrepreneurship, VC financing, and so on and so forth, you get your audience built pretty quickly,” Jeff states. Blogging, while still effective, is much more likely to go unnoticed. Jeff recommends using podcasting, which he says “is back,” to develop your voice and an audience.
Hear more from Jeff Clavier and listen to the full interview between Cory and Jeff here on the Spearhead Podcast.
In the interview, Jeff Clavier and Cory Levy talk about:
- What Jeff would change if he could go back in time
- Jeff’s early investment in FitBit
- How to build an investment network
- How to say no to founders
- How to stand out as a new investor
- And more!
- Jeff and Cory begin their discussion by talking about how Jeff started as an investor, and his first investment (1:22)
- Jeff gives a very straightforward answer to the questions “What would you tell your younger self?” (1:47)
- After missing on several large tech companies, Jeff didn’t massively change his investment strategy; he refocused his energy on understanding how much conviction he has, which leads his decisions (4:08)
- Jeff explains how he develops conviction at (5:17)
- Jeff details how he met the FitBit team and what led him to make his first investment in the company (8:30)
- FitBit, a consumer hardware company, was not in a very “sexy” industry. Cory asks, “What would you say today is similar to Fitbit, where an industry that maybe is not sexy that you’re investing in?” (11:11)
- Without sharing confidential information, Jeff discusses a current prospective deal and the details of how he met the team, conducted due diligence, and why he decided to submit a term sheet (13:04)
- “How data-driven are you when it comes to managing your schedule?,” Cory Asks (15:55)
- Building a network as an investor is crucial to being able to find early-stage founders and get included in deals. Jeff explains his advice for building a network in San Francisco (18:27)
- Why podcast is popular once again, and it’s importance for investors (20:55)
- The importance of valuation in today’s investment climate (23:44)
- How Jeff says no, which he has to do “99.5%” of the time.
- Jeff discusses who he looks up to and what he’s learned from them (28:07)
- The show closes with a question about Jeff’s biggest challenge right now — something he’s trying to improve on (29:53)