The Tech Coast Angels look for investment opportunities where new capital and mentoring will take companies to the next level. TCA intends to materially increase company valuations to result in future capital rounds at increased values.
TCA operates throughout Southern California and is organized into five regional networks:
Each member is affiliated with the network that covers his or her office or residence. Our members collaborate extensively within and across networks. They are welcome and encouraged to attend any TCA meeting or activity. While deals are processed by the group, TCA members invest as individuals. All members have an opportunity to participate in any member-led investment.
The investment process begins when companies submit their business plans to TCA’s website for consideration. Business plans are received by TCA’s staff and then a screening team with sector expertise. Companies that meet TCA’s investment criteria are invited to present their plan to TCA members at Screening Sessions held by each network. Screening Sessions are held in locations within each network area every two to three weeks where companies make presentations of their business plans and investment merit. Screening Sessions are interactive with TCA members asking questions following the presentation.
Those companies receiving a positive initial response are assigned a TCA team having appropriate expertise. The team is responsible for conducting due diligence, negotiating terms and mentoring. Other presentations at the Screening Sessions of other networks may also be appropriate. Once due diligence is completed and a terms sheet is developed, the company completes presentations to networks to determine the total number of members interested in investing. Following a completed deal, the TCA mentoring team will assist the company in future funding rounds. The members of the network where a venture is located are responsible for processing the venture's funding application and typically lead the due diligence.
Additionally, Dinner Meetings for networks are held once per month where one to two companies with investments by TCA members update the group on their progress or present a final investment proposal
TCA Investment Criteria:
As a group, TCA members have typically invested in 10-20 new deals per year and an equal number of follow-on rounds. Individual members are expected to invest an average of $50,000 per year, typically two investments of $25,000. While the amount invested by TCA members can vary widely according to economic and market conditions, total investment on new and follow-on deals by TCA members in any given year have averaged $8-9 million annually. Outside investment in these transactions averages ten times this amount.
TCA members have access to a private web-site with restricted access which ties networks and members together. The web-site contains a calendar of all TCA events for all networks, and bios and contact information for all members. With respect to transactions, a portfolio database is available, together with a description of companies, discussion of deals, due diligence memos, deal terms sheets, deal schedules and scheduled closings. All deal information can be downloaded from and uploaded to from members browsers. Members can also use the web-site to email other members and RSVP to TCA events. Members interested in a particul;ar deal may elect to receive email notices as due diligence memos and deal announcements are posted. A File Cabinet is also available which contains forms for due diligence checklists, terms sheets and other deal documents.
Members develop by getting involved in due diligence teams and mentoring companies. It is critical that they contribute their domain expertise and general experience to evaluation of potential transactions. Education sessions are provided three times per year at joint OC-LA dinner meetings held in Long Beach, and individual networks conduct occasional training sessions for new members. Addcitionally, training in the use of the private website is available, and members are encouraged to avail themselves of this opportunity. The TCA staff would be delighted to help with this training.
TCA has fromal Rules of Membership and Conduct (ROMAC), which must be executed before becoming a member. The ROMAC covers rules that are designed to support a businesslike organization. For instance, members are prohibited from receiving any consideration for bringing deals to, or getting funded by TCA or its VC affiliates. Members may not solicit other TCA members for non-TCA deals and are not allowed to use the website for personal announcements not related to TCA. However, members who serve as mentors to a venture that is deemed not ready for TCA are permitted to receive founders' shares for services rendered, subject to some restrictions. A Board of Governors (BOG) oversees the activities of TCA as a whole, and the individual networks are administered by executive committees headed by a President, who is automatically a BOG member.