By John Harbison, TCA Chairman emeritus
TCA members who invested in the Series A Round of Companion Medical in 2014 realized a 47x return when the company was acquired by Medtronic in August 2020 for an undisclosed amount. Early investors in Companion Medical may also realize possible future milestone payouts, thus increasing their return to around 85x.
Sean Saint, founder and CEO of Companion Medical, the first and only FDA-cleared smart insulin pen system for those living with Type 1 and Type 2 diabetes, said that the process to find funding is difficult for entrepreneurs, but that TCA was approachable.
In 2013, Saint went to TCA-San Diego’s Quick Pitch event. He entered the following year and won the 2014 Quick Pitch Competition’s Best Content with the chance to pitch to Tech Coast Angels. “There were some issues with the due diligence process, and I wasn’t able to tell the story to people who weren’t in the industry – but there were a few members who understood us. In addition to providing capital, TCA members introduced us to many contacts who helped us grow, learn and be better.”
With just a few months’ experience as a new member of Tech Coast Angels, Justin Jue was one of the early investors. He’d been advised by more seasoned members not to invest for the first six to twelve months – but to listen and learn. However, he had recently worked in the medical device industry and saw the market need for a smart pen.
Jue said, “At the time of their presentation to TCA in 2104, Companion Medical didn’t have a working model. They had a basic prototype, a vision and an ambitious leadership team with passion and commitment. But after the presentation, I met with the CEO, Sean Saint a few times, and we spoke the same language. Sean understood the struggles of those who live with diabetes and I could tell he ‘got it.’ I thought if they could make this device a reality, they could be incredibly successful.”
“My advice to new investors is that you should listen and learn 99% of the time, but if you have industry expertise or special knowledge of what a company is trying to pursue, then with proper due diligence it may be worthwhile investing in them,” added Jue. Get to know the founders of the company as much as possible in small meetings or lunches, and get a feel for that person’s character, their vision, and their passion for the project.”
Saint acknowledges the wisdom of San Diego’s entrepreneurial ecosystem and Tech Coast Angels. “The wonderful thing about TCA is that there is always someone in the room who knows your industry and can help you communicate it better to other angel investors. There’s a ‘wisdom of the crowd’ and a shocking number of resources within TCA that can help you. Southern California’s entrepreneurial system truly benefits from its angel community.”