Screening Process

Screening is an important part of the TCA funding experience. Typically, we have over 1,000 companies per year apply on our web site for TCA funding. Approximately 25 percent of these companies make it to the screening process and 10 percent make it into due diligence. Although each year varies, we typically fund between ten and twenty new ventures per year. TCA consists of four networks: San Diego, Orange County, Los Angeles and Santa Barbara / Westlake Village, each facilitating the first three steps of the deal flow process a little differently. The Los Angeles and Santa Barbara / Westlake Village funding process consists of the following steps:

1. Web Application

Entrepreneurs apply to TCA on the Internet. This process includes filling out an investment summary overview and uploading an investor PowerPoint presentation. Read our PowerPoint presentation guidelines.

2. Initial Review

TCA staff perform an initial screening of the application to ensure it is within our scope of interest. If you pass the initial review stage you will be invited to attend a bi-weekly screening session to meet our members and observe other companies making presentations to get a better understanding of our process and the questions that will be asked. These screening sessions are typically held on Friday mornings twice a month at a local University. TCA recommends all applicants attend one screening prior to presenting to the group.

3. Pre-Screen Presentation

If the screening staff feels you are a good candidate to make a presentation at one of our general screening sessions you will be invited to give a presentation to a small group of members who have domain expertise in your technology or market on a web conference call or at a separate meeting. The purpose of this Pre-Screening meeting is to provide you with coaching on your PowerPoint presentation and determine if you are ready to make the initial screening presentation to the group.

4. Screening Presentation

Typically up to four companies present at a bi-weekly screening sessions. This consists of fifteen minutes of PowerPoint presentation and fifteen minutes of questions and answers. After each presentation, the entrepreneur is asked to leave the room while TCA members discuss whether there is enough interest to move the company into due diligence. The entrepreneur is then invited back into the room and given feedback. Presentations are videotaped so that members who are not present can still participate later online.Typically, entrepreneurs present at all four network over a period of a month. Therefore, it is possible for a company to get little interest at one network, but enough interest at another that will allow it to move forward to due diligence. For more details on the screening sessions click here.

5. Due Diligence

A due diligence team is formed based on the number of interested members who signed up during the screening. A deal lead steps forward and helps coordinate the due diligence activities. Due diligence consists of verifying representations by the entrepreneur, speaking with customers, reviewing agreements and patents (if any), checking references, backgrounds, etc. The results of the due diligence process are posted on the TCA website (in the members-only section), and if the results are positive, the venture moves forward to dinner meetings.

6. Dinner Meeting

Companies that pass due diligence present at monthly dinner meetings at each network, introduced by the TCA member who led the due diligence team. This allows the entrepreneurs to present to members who might not have seen them at screening or were involved in the due diligence process. This is the final opportunity for the entrepreneurs to garner enough interest from members to secure funding. Typically a signed term sheet is available when a company presents at this stage and this is the final "road show". TCA members' terms of investment follow "standard" terms for financings developed over the years by VCs and other sophisticated investors.

7. Funding

Funding occurs after there has been enough interest generated through dinner meetings and internal communication from the entrepreneur and deal lead. Members invest in deals individually; however, everyone invests based upon the same term sheet. Thus, only a small percentage of members our members need to participate for the venture to secure funding. Typically, the minimum individual TCA member's investment amount is  $25,000.