Well, that varies. Successful exits can take several years; it takes time to build a startup. You'll see failures in your portfolio and they often happen in a year or two. One or two successful exits make up for all the failures, and more. The economy at large has a lot to do with exits, too. During boom years exits came fast and furious, today the climate is more prudent and companies are diligently building value before being acquired. The climate can change quickly. Expect an average startup to grow for 5 or more years before a successful exit.
That amount might be different for each member based on your net worth, but consider starting modestly. As a member you’re asked to invest a minimum of $50,000 per year, that’s typically in the form of two deals at $25k each.
The first step: learn as much about early stage investing as you can. Get to know your fellow members, the accumulated experience and knowledge of the Tech Coast Angels is a great place to start this process. We offer educational seminars on a regular basis, too. Spend time working with a due diligence team; you’ll learn the unique risks of each investment and improve your investment spotting skills. Lastly, diversify. Invest in multiple deals that you feel are of a high quality and spread your risk; it makes intuitive sense and our computer simulations concur.
TCA is a catalyst in helping build Southern California’s economy into a thriving center of technology and entrepreneurship. Our members are very active in the entrepreneurial community, attending and participating in conferences, networking events, entrepreneurial competitions and other venture capital events. Our relationships with the major colleges and universities in Southern California provide us both access to potential commercialization opportunities and expertise that is invaluable as we analyze potential investments.
Additionally, we receive numerous investment opportunities for review from angel groups across the United States. Our relationship with the venture capital community often gives us early looks at deals from them that fit our investment criteria. TCA also has an excellent relationship with the major economic development agencies in Southern California which are often a referral source of entrepreneurial /investment ideas. All of these sources keep our deal pipeline full which is critical in creating a high quality diversified pool of investments for our members.