Angel network’s members realized a 15x return from 2003 investment;
deal lead credits patience, great company leadership for “going the distance.”
IRVINE, Calif. – February 14, 2019–Tech Coast Angels (TCA) announced its sixth highest exit ever when Hub Group, Inc. recently purchased CaseStack for $255 million. This successful exit was unique in many ways: the exit had a very high return (15x); the length of time to exit was nearly 15 years from the time of initial investment; and CEO/founder of CaseStack continued to shepherd the company. from founding through to acquisition.
CaseStack’s proprietary Software-as-a-service (SaaS) provides non-asset based logistics, supply chain, and less-than-load (LTL) shipping solutions to consumer packaged goods companies and warehousing firms. The company’s fit with the Hub Group, a leader in freight transportation management, delivers great opportunities in the industry.
“CaseStack had created an SaaS model that was a perfect match for customers–and creating customers–well before SaaS was a trend,” said Bill Collins, co-deal lead and TCA long-time member. “Small but successful consumer companies like Celestial Seasonings and Hansen’s Sodas could manage their logistics without having to purchase and maintain software. What we saw back in 2003 was a unique, effective solution to a problem: one that would elevate to hypergrowth with an estimable answer for an emerging customer base.”
Collins and the late Bill Hahn, co-deal lead, articulated the expected hypergrowth, and the pair successfully explained CaseStack’s uniqueness and its expected customer base upsurge to other TCA members and investors for the Series A Round of $470,000 in 2003. The company went through additional funding rounds over the 15-year period, and also spun off another company, SupplyPike, that has an annual revenue of $2.0M, of which the initial investors benefitted.
The average angel investment-to-liquidity time is about seven years. Although CaseStack continued to thrive, grow customers, and succeed for 15 years between investment and sale – including topping Deloitte’s Fast50 list – this deal was also an exercise in patience. The majority of angels and VCs were surprisingly patient for the duration. Collins credits CaseStack’s founder and CEO, Dan Sanker, as well as Hahn.
“Dan Sanker inspired confidence and showed fortitude. Sometimes investors don’t believe founders can go the distance, but Dan is unique: he has the right mix of passion, the insight and the leadership skills,” said Collins. “Bill [Hahn] continued to be an incredibly good liaison: as an observer on the CaseStack Board of Directors for twelve years, he regularly communicated developments and progress to the investors.”
“It was always a pleasure working with the Tech Coast Angels,” said Sanker. “TCA is one of the best organized groups and almost all of the participants are involved for the right reasons and have robust business backgrounds. They truly understand how to grow businesses.”