Do More Faster India, 2nd Edition

Chapter 61Seed Investors Care about Three Things

Jeff Clavier

Jeff founded Uncork Capital in 2004 (then called SoftTech VC) to serve an unmet need of startup founders: active support and capital for companies in their first 18 months of life. Jeff has been a Techstars mentor since 2007.

In August 2010, my family celebrated the 10-year anniversary of our move from France to Silicon Valley as well as my joining the venture capital industry. Six of these 10 years were spent working with very-early-stage teams, ranging from the raw idea stage to the point at which the initial product worked so well that the company has two founders and tens of millions of avid users.

One of the most common questions I get several times a week is “What characteristics are you looking for in an early-stage company before making an investment?” You could list 10 criteria, 20 things, or 30 checklist items and they would all be valid—things like the result of lessons learned, experience gained, and mistakes made. In the investing business, the best lessons are often learned the hard way—by losing or wasting money on things that eventually don’t work.

Seed investors—people like me who are typically putting the first chunk of cash into a new startup—have the shortest checklist. Because we invest so early in the life of a company, a lot of the data points that later-stage investors use to evaluate an opportunity are not yet available to us. So, I focus on three things: “People, Products, and Markets.” ...