NEWS/OPINION: Tech Coast Angels OC Launches Fund. Target is $2 Million….
The first news about this fund to be released, to OC Startups Now, was written as an opinion piece by Jim Pickell, the administrator of the new TCA OC fund and its official spokesperson. In this way, Pickell can talk personally about why he saw the need for this TCA OC fund, a huge boon for OC startups and entrepreneurs….
I’ve been a strong advocate of angel investing and a member of Tech Coast Angels – Orange County (TCA – OC) for several years. Having invested billions of dollars into early-stage companies, TCA is perhaps the largest angel network in the U.S., with multiple chapters in SoCal, also including LA and SD.
I’ve found angel investing to offer an incredible way to see early-stage deal flow and exciting new technology. Each week “angels” can attend optional weekly “screenings” at TCA’s offices at the Cove, the physical space of UCI Beall Applied Innovation.
At these meetings, angels meet regularly with experienced peers and thought-leading entrepreneurs, to support the start-up ecosystem in the community, build networks to deploy capital, mentor and support entrepreneurs, and have fun, all while attempting to generate a return on their investment.
Admittedly, many first-time angels become frustrated with the amount of time it takes to make relatively small investments.
The prospect of achieving a well-diversified angel portfolio is daunting, especially for full-time professionals. And it’s notoriously hard for entrepreneurs who haven’t raised capital to navigate the angel screening process and access capital when they need it.
As such, at TCA we have recognized the compelling need for an angel fund. Over the past few years our OC, LA and San DD chapters all agreed to launch their own chapter funds.
Accordingly, I am pleased to share that this month we have launched TCA OC’s inaugural angel fund,TCA OC Fund 20.
The fund is limited to accredited TCA members (of any chapter).
It’s admittedly a smaller fund, with a target of $2 million; however, this capital will all be deployed in 2020, across a target of 8-20 high-quality and innovative companies.
We should have $1.5 million to $2 million by the end of the month.
Each year we intend to raise a subsequent fund, with TCA members also having the ability to participate alongside the fund with further investment.
Uniquely, the fund has NO carry, i.e., no one is compensated for fund performance. In fact, fund participants will make all investment decisions by voting on deals, subject to certain parameters.
While there’s admittedly a long holding period for any angel investment, we feel this fund will be impact-ful for entrepreneurs and our community for many reasons, including:
Helps Entrepreneurs. The fund is intended to create the best place for local entrepreneurs to raise their first dollars. Local entrepreneurs can access the expertise and connections of the TCA network, and raise more money in less time.
Increases Diversification. Angel investors are far more likely to generate attractive returns by investing in more companies, across a wider range of industries. By utilizing the brain trust of other TCA members, investors can access industries in which they are less experienced. A small investment in this annual fund allows members to achieve that.
Higher Efficiencies. Whereas, historically, many angels were often in, or approaching, retirement, this fund is now available for full-time professionals and others who have less free time.
To participate in the fund, one would first need to become a member of TCA.
To explore options, please contact Tony Sarris,executive director, TCA OC.