Fund: Tech Coast Angels
Posted by Dean Rosenberg on 2009-12-31
Tech Coast Angels led two rounds of funding for my company, AIRSIS, Inc. The process in both cases was fair, efficient, and in our case, resulted in $2M in funding at attractive terms ($1M in each of 2 rounds). I have read some of the negative reviews, and it seems like many come from entrepreneurs who may not have the right expectations of what an angel investment group is all about. Here are my 2 cents:
1. You have to go into the process realizing that you are not pitching to a VC fund - you are pitching to a group of angel investors who have been conveniently assembled to allow you to make a single pitch to 40+ accredited investors. Some of these investors can invest $500K+ in your deal. Most will likely invest $25K to $50K.
2. If you get the attention of a TCA member to lead your deal, he/she will do much of the heavy lifting to rally others into the deal. You will also have an opportunity to present in other regions. While this takes more time, you have the advantage that you have already been vetted by existing members. In both of my investment rounds, we received funding by members in San Diego, Orange County, LA, and Santa Barbara.
3. The closing and funding process was professionally handled (by a TCA-hired attorney), and the term sheet gave us a mechanism to bring our own non-TCA contacts into the deal, with these contacts knowing that terms were set in an arms-length manner (as opposed to friends-and-family deals).
4. Since our funding in '05 and '07, TCA investors have loaned my Company additional funds when we needed it (over $400K), and have provided strategic counsel and even access to customers, partners, and related business development. I have 30 TCA investors, and without exception all have been patient and entrepreneur-friendly. I have done my part in this by keeping all investors informed on the Company's progress through quarterly investor updates and annual audited financials.
The bottom line: It is extremely difficult to raise $500K to $2M from any source. It is usually too big for friends and family (or a single angel investor), and too small for VC. Thus, for my company (raising $2M), TCA was a VERY good fit.
If you have questions about my experiences with TCA, feel free to contact me at:
CEO, AIRSIS, Inc.