Southern California Angel Network Invested $14.2 Million into 43 companies;
Achieves Fourth Highest Investment Total in its 20-Year History
IRVINE, Calif. – May 30, 2018 –Tech Coast Angels (TCA) issued its 2017 annual report (click here)) today. The angel network invested $14.2 million in a total of 43 companies. Life sciences was the largest industry in 2017, both in terms of companies receiving invested and investment amount – with half of the initial investments and one third of the total investments in life sciences. Other prominent industries were software and internet/apps, and these three industries corresponded to 68% of the total companies receiving investment, and 73% of investment amount.
“This is the seventh consecutive year that TCA investments have exceeded $10 million and the fifth consecutive year that our investments have been above $13 million – the longest sustained level of investment in our twenty-year history,” said Christopher Hameetman, Chairman of Tech Coast Angels.
The average investment in new portfolio companies in 2017 was $388,000, beating 2016’s $291,000 for average investment, and new companies comprised 57% of the total invested in 2017, down slightly from 62% in 2016, but up from 35% in 2015 and 41 % in 2014. The average for follow-on investments was $275,000, up from $196,000 in 2016. Valuations of companies in 2017 were similar to 2016: 70% of the investments in 2017 were in companies valued at less than $6M compared to 69% in 2016, while 17% of companies were above $10 million in 2017 versus 16% in 2016.
“While our focus is still on early stage companies, 69% of our investments were in companies already in revenue,” said Hameetman. “We see this as a trend driven by many reasons – friends and family investments are taking really young companies further due to lower technology costs, companies are entering the market earlier with ‘minimum viable products’ before seeking funding, and investors expect companies that have launched products or services to be closer to breakeven in case of a downturn.”
TCA had five exits in 2017: two acquisitions, one buyout, and two companies that went public. As of December 2017, TCA has actualized 70 exits since its founding in 1997, and of the 351 investments made in the angel network’s 20-year history, 54% are still active.
“We continue to seek strong early-stage companies, both natively in Southern California and through the Angel Syndication Network, which now boasts over 40 prominent angel groups throughout the country, each nominating their best deals to share,” concluded Hameetman. “While our focus will always remain Southern California, this syndication provides a great opportunity for superb young companies from all over the US, some in places where angel investment is not as prevalent as here, with over 1,500 angels and over $1 billion in direct investment.”
TCA’s 2017 annual report includes a summary of the angel network’s activity in 2017, including charts that segment TCA’s investments by industry, and provides an investment outlook for 2018.