NEWS: Active Angels Invest in Bevy of Startups; Tech Coast Angels Members’ Investments Reflect Diversity of Startups in SoCal Region
Individual angel investors who are part of Tech Coast Angels’ five SoCal chapters have invested in a diversity of startups recently, including a medical device company; a company that raises poultry in an environmentally-conscious way; and an augmented reality (AR) software company that serves the ophthalmology industry.
Tech Coast Angels, (TCA) is the leading source of funding to early-stage companies in SoCal, as well as the second-most active angel investor network in the U.S. in terms of funded deals.
Individual investors typically invest between $25,000 and $50,000, although they can invest more. There are also three funds under the banner of Angel Capital Entrepreneur Fund (ACE I, ACE II, and ACE III), which have invested in companies in tandem with individual investors. Many TCA members invest through the ACE fund, as well as through sidecar investments in companies.
TCA has five chapters: OC, LA, SD, Central Coast and the Inland Empire. As of February, Hicham Semaan has been the new president of the OC chapter. He’s been a TCA investor since early 2015. He was the CEO of QuickStart, with HQ in Austin, for more than 18 years. The company provides online IT training.
Semaan replaced outgoing president Grant Van Cleve, who became the CEO of Buy It Installed, with HQ in Irvine, last August. See related story here.
An indication of the robustness of TCA’s investments: Last year the five chapters collectively invested more than $14 million in 43 companies across a diverse mix of industries, according to TCA’s 2017 annual report.
These are some of the startups TCA has invested in recently…
Eyedaptic, with HQ in Laguna Beach, is developing visual-aid software, for age-related, macular degeneration and other retinal conditions. Its software is embedded in AR glasses that simulate natural eyesight to restore a complete field of vision. AR is the overlay of digital images onto the real world.
Retinal vision disorders affect 400 million worldwide, including 178 million who suffer from age-related macular degeneration.
TCA OC has invested $80,000 in Eyedaptic’s funding rounds. The company has amassed more than $550,000 in total, mostly from Ophthalmology Retinal Specialists.
Eyedaptic is currently raising $1 million in convertible notes.
The pre-revenue company was co-founded in 2016 by Jay Cormier (CEO) and three others. Cormier previously participated in three startups/turnarounds/acquisitions including Teridian, a “smart” energy measurement company, which was acquired in 2010 for $315 million.
Eyedaptic recently participated in OCTANe’s LaunchPad accelerator.
OCTANe is a life sciences and tech accelerator in Aliso Viejo.
“It has been great working with Jay and seeing the evolution of Eyedaptic over the past eight months,” said JC Ruffalo, director of LaunchPad and investor relations at OCTANe. “Jay has built a great company around a great idea to improve the quality of life (for) people suffering from…macular degeneration.”
Hardware-enabled software products are “powerful, as well as capital efficient,” Cormier told OC Startups Now. “That – coupled with (AR) experiences and family members with macular degeneration, badly in need of help – came together to inspire the founding of Eyedaptic.”
Phytonix, with HQ in Black Mountain, N.C., is all about combating climate change.
The company developed a way to take carbon dioxide from manufacturing and industrial carbon emissions and turn it into butanol. Thomas Lee, a TCA OC member, described butanol as “a valuable commodity.”
This has the “enormous double benefit of cleaning up the environment, (therby) reducing the world’s carbon footprint, while also being able to produce butanol far more efficiently and at a considerably cheaper cost than current methods,” Lee said. “Phytonix’s technology can also be readily adapted to produce other valuable chemicals, such as longer-chain alcohols and fatty acids.”
The company raised $2.5 million before approaching TCA in 2016, said Lee, who’s based in Irvine.
TCA invested $260,000 from March 2016 to September 2017. The initial amount was raised over the first few months of 2016. Then Phytonix received a “significant investment” from the Keiretsu Forum, with HQ in San Francisco, Lee said. Then the company circled back to TCA for a follow-on investment and received more money from the angel group. The OC chapter contributed $135,000 of that.
Phytonix used the funds to obtain its first pilot plant – in Canada – so it could start scaling operations.
The company is now raising another $1.1 million at a higher valuation, At the time of TCA’s investment, its valuation was set at $8.1 million.
Phytonix, founded by Bruce Dannenberg (CEO), is in-revenue. During Q1, it saw nearly$340,000 in recognized revenue, Lee said.
Prominent customers can’t be disclosed; they include two industry partners, Lee said.
CurvaFix, with HQ in Bellevue, WA., was launched last year to develop orthopedic implants for pelvic fractures.
“These fractures, often caused by car accidents or falls, are among the most serious injuries treated by orthopedic surgeons,” CurvaFix CEO Steve Dimmer told OC Startups Now.
Dimmer has 25-plus years experience building med-tech companies, including five startups. Recently, he was co-founder and CEO at Innovative Pulmonary Solutions, which is now Nuvaira.
“Existing methods to treat these fractures require lengthy, complex surgical procedures and can result in poor bone fixation,” he said. “That can cause pain, slow down recovery and can contribute to long-term disability.”
The idea for the implant was conceived by Robert Meek, a physician and clinical professor emeritus at the University of British Columbia and the former division head of orthopedic trauma at the university, as well as at Vancouver General Hospital. Meek is chairman of CurvaFix’s surgeon advisory board.
Dimmer said CurvaFix’s implant “follows curves and fills the space within the pelvic bones.”
The anticipated benefits are improved fixation, shortened surgery, faster recovery and reduced health care costs.
The company raised $2.5 million in a Series A round that comprised multiple angel investor groups in the Northwest and throughout the country, including TCA.
The funding enabled CurvaFix to complete development of its device and set the stage for early commercialization.
TCA OC member David Friedman invested in CurvaFix. His interest was piqued by the usefulness of the device and by CurvaFix’s board of advisors.
Dimmer declined to disclose any other advisors besides Dr. Meek.
Pasturebird, launched in 2015 with the goal of raising and producing poultry that is good for the land, the animal and consumers.
“Poultry production is at a crossroads, with consumers demanding better
conditions for farm animals, and old industry players using misleading labels like ‘free range’, ‘organic’ and ‘antibiotic-free’ that do not mean what the consumer thinks,” Grieve said. “For example, ‘antibiotic-free’ chickens can receive antibiotics their entire lives and ‘free-range’ chickens can spend their entire lives indoors.”
The company sells chicken meat to restaurants, grocery stores and online.
The two founders, Paul Greive, (CEO), and Jeff McDaniel, (COO), founded two previous companies. Both were small, lifestyle businesses.
Pasture-raised poultry is a completely new industry for both, but they “learned that we have complimentary skill sets and a shared passion for real food,” Greive told OC Startups Now.
This company, with HQ in Temecula, declined to disclose how much of an investment it received from TCA. It plans to use the funds for increased production and technology development at its San Diego County location.
Pasturebird is in revenue with $2 million in sales in the first 30 months since forming the company, Grieve said. Prominent customers include Wolfgang Puck, the Bellagio Hotel, and sports teams including the LA Lakers and LA Dodgers.
Echo, with HQ in San Diego, devised a hybrid microscope for both capturing and storing images.
TCA SD led Echo’s $2 million seed round, and then co-led a $7.5 million Series A round, said Dean Rosenberg, president of TCA SD.
CEO Eugene Cho is traveling out of the country and declined to comment.
More About TCA
TCA, with more than 325 active investors, continues to invest in both tech and non-tech companies. Lifesciences was the largest sector last year, followed closely by software and the internet/apps.
TCA has had five exits:
TCA’s ACE Fund II invested an initial $100,000 in WeGoLook that it followed with more than $100,000 the following year for a total of about $211,000. WeGoLook was later sold to Atlanta-based Crawford & Co. for more than $42.5 million. WeGoLook combines tech with an on-demand workforce to help businesses and individuals gather and validate information anytime.
Last September, AnyMeeting, which started in Irvine and has a location in Huntington Beach, was acquired by Mountain View-based Intermedia, according to news reports. AnyMeeting is a web- and video-conferencing provider.
• One buyout after an acquisition: MaMoCa, with HQ in San Clemente. MaMoCa developed 3D marker-less motion capture technology for content creation for video games, TV and theatrical content. It was acquired in 2008 by Motion Analysis, with HQ in Santa Rosa.
Savara, with HQ in Austin, had previously set a record for a TCA investment, at $6.6 million. It went public in April 2017 at approximately $5/share as the result of a reverse-merger with Mast Therapeutics, according to news reports. The company focuses on the discovery and development of treatments for rare respiratory diseases.,
Dthera, with HQ in SD, completed its process of going public at the end of 2016. The digital therapeutics company works to improve the quality of life and reduce anxiety in patients with Alzheimer’s and dementia. It developed an artificial-intelligence-powered digital health platform that collects photos and audio from family members and creates hyper-personalized video stories, which are then sent to the patients.