Tech Coast Angels is the investor of choice for Southern California entrepreneurs and has over the years expanded its investments to include companies all over the US

If your company is based in Southern California, matches TCA’s early stage and industry focus, and is seeking to raise from between $50k and $3 Million, then TCA might be the right source for funding. Even though we might not take the entire round, our relationships and affiliations with the Angel Syndication Network can potentially provide much, if not all, of your funding needs.

To get started is simple.

TCA’s Investment Criteria:

  1. US-based and mostly in California*
  2. Strong and resourceful management team with impeccable integrity
  3. Solution to a compelling business problem
  4. Large identified market opportunity
  5. Defensible business model / proprietary technology
  6. Sustainable competitive advantage
  7. Some level of market validation or traction
  8. Ability to attract future funding
  9. Credible exit potential

*About 70% of our companies are located within Southern California. However, we will consider ANY startup and seed company based on meeting the other criteria. Depending on your technology and market segment, we will determine the best network for your funding needs. We syndicate deals (inbound and outbound) with many angel groups in the United States and are one of the leaders of the Angel Syndication Network which includes more than 50 Angel Groups. Check out the Angel Capital Association website for a full list of member angel groups in the U.S.

Ventures That We Seek

We expect the entrepreneur to explain the relevant experience and domain expertise of your team. If the team is incomplete, we expect you to recognize who is needed to round out the team.
TCA defines technology broadly in many industries, including Hardware, Software, Digital Media, Consumer Products and Services, Financial Services, Life Science, CleanTech and Industrial. Regardless of industry, a successful applicant must be able to demonstrate market validation of its technology. Ideally, the company will have revenue and a strong sales pipeline.
You must demonstrate that you can achieve significant presence in a well-defined market or niche. The niche can be within an existing market (Curvafix which provides a unique orthopedic screw for bone fractures ); or it can be a new niche (e.g., Green Dot which provides banking for the uninsured).
This must be in either a developing market (e.g., Parcel Pending in the electronic locker space) or in an existing market. You must present a credible plan for achieving that growth, not a Chinese Glove Syndrome (“there are over a billion Chinese, we will sell 1% of them a pair of gloves at $20/pair, which gives us revenues of $200 million”) without supporting data to show how you would sell them
Some examples: a “blocking patent” (that can keep out competition); a vanity number (e.g. 1-800-WEDDING); a domain name (e.g., buy.com); “first-to-scale” advantage (i.e., show you already are the first company to achieve some scale in a new niche). Sustainable advantage can also be achieved by a combination of technology, supply chain lockup, unique processes and partnerships.
Because TCA members assume a great deal of risk by investing in early-stage companies, applicants should be able to make a compelling case for a 10x or better return on investment within a defined period. Investments that are expected to require no more funding than the current round are especially valued as are those that were able to use grant capital and other non-dilutive funding.

TCA members look for opportunities where the capital sought will take the company to the next level, and materially increase its valuation. TCA investments often bridge the gap between proof of concept to a larger angel or VC round. A company must be able to demonstrate how it will use members’ investment to complete at least some of the following:

  • Proof of Concept
  • Prototype of its product or technology
  • Patent filing (for broad patent)
  • Product development
  • Market research
  • Product launch
  • Major contract or customers
  • Management team
  • Reduce other investment risks

Screening and Evaluation

Screening is an important part of the TCA funding experience. Each year, members of TCA look at and evaluate more than 1000 companies. Many of those companies then apply online to our screening process. Approximately 25 percent of these companies make it to the screening process and 25 percent make it into due diligence. Although each year varies, we typically fund 30-40 new ventures per year plus a similar number of existing portfolio companies which are seeking additional growth capital.

1. Web Application

The first step in entering the TCA funding process is our online application. This process includes filling out an application with an overview of your company, including a summary of your financials. You’ll also upload an investor PowerPoint presentation.

2. Initial Review

TCA staff and industry-specific investor panels 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 present at a pre-screening.

3. Pre-Screen Presentation

Each panel’s prescreening process varies, but the general concept is an elevator pitch between 8 and 15 minutes, followed by Q&A. The prescreen presentation is given to a small group of TCA 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 determine if you are ready to present to the larger group, and give you constructive feedback to improve your presentation. You’ll receive feedback, and if you pass the pre-screen, you’ll be invited to present at a screening session. Of note is that TCA has both general prescreens as well as specialized medtech prescreens.

4. Screening Presentation

Typically three to four companies present at a bi-monthly screening sessions. This consists of fifteen minutes PowerPoint presentation and fifteen minutes of questions and answers. After each presentation, TCA members discuss whether there is interest to move forward into due diligence. The entrepreneur is given feedback regardless of outcome. Presentations are usually videotaped so that members who are not present can participate later online on our member-only secure website. The goal of a screening session is to get significant interest from TCA members and attract a “deal lead”, who will coordinate the due diligence and be your point of contact throughout the due diligence and funding process. Funding can be through one of the TCA Funds as well as individual side car investments

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 coordinates 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 funding through one of the funds and/or through side car investments.

6. Monthly Lunch/Dinner Meeting (optional)

Companies that pass due diligence may present at monthly lunch/dinner meetings at most of the networks, introduced by the “deal lead”, who led the due diligence team. This enables the entrepreneurs to present to members who may not have seen their initial presentation. This is the final opportunity for entrepreneurs to garner enough interest from members to secure funding. Typically a signed term sheet is available when a company presents at this stage. Generally 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 and communication from the entrepreneur and deal lead. Members invest in deals through our funds and/or individually; however, everyone invests based upon the same term sheet. Typically, the minimum individual TCA member’s investment amount is $25,000. TCA funds typically invest a minimum of $100,000 per company.

Apply for funding!

Entrepreneurs can apply for funding though Tech Coast Angels by completing this Funding Application. Apply for funding here!

Some advice for completing the application:

1. Complete the application fully and thoroughly. We don’t charge entrepreneurs an application fee, but we expect everyone to treat the application process seriously.
 
2. Remember that TCA invests primarily in start-up’s headquartered in Southern California. There are exceptions, but we’re much more demanding with applications outside the area. It’s much more likely that applications outside of SoCal will be rejected early in the process, unless they are referred by a current member or an angel group that is local to the start-up and invested already.
 
3. Make sure that your application reflects the traits that TCA seeks in an investment to the greatest extent possible.