At the DEMO ’07 conference this past week in Palm Desert, CA, I sat down at lunch under gloriously sunny skies at the Desert Springs Resort on Wednesday with Jeff Cohn, Investment Screening Director at Southern California’s Tech Coast Angels. I wanted to talk with Jeff about how things have been going for this self-described “largest angel network in the country.” Turns out 2006 was another good year — Cohn said the group invested in 20 deals last year, after doing a similar number in 2005, and that had been up from 17 deals in 2004.
Tech Coast Angels, founded in 1997 by Luis Villalobos, a successful Orange County serial entrepreneur, provides funding and guidance to “more early-stage, high-growth companies in Southern California than any other venture capital, angel, or other private equity group,” the organization says. Over ten years, its members have personally invested $80M in 124 companies and have helped these portfolio companies attract an additional $778M in capital, mostly from venture capital firms. Tech Coast Angels boasts some 20 “venture capital affiliates,” Cohn told me, most based in Southern California, though a few are in the Bay Area.
What makes Tech Coast Angels different, said Cohn, is the value-add the group provides beyond just seed and early-stage capital. Its members also mentor and coach entrepreneurs, help recruit additional management, and provide access to institutional investors and strategic partners. Tech Coast Angels has more than 270 members, and is actually made up of four networks — in Los Angeles, Orange County, San Diego, and Westlake/Santa Barbara. Each geographical group numbers between 60 and 70 members.
Interestingly, Tech Coast Angels had just hosted its own startup pitch event a week or so before the DEMO conference: the 2nd Annual Los Angeles Fast Pitch Competition. That was January 22 at the UCLA Anderson School of Management, held in conjunction with LA County Technology Week.
I also learned that Tech Coast Angels had been an early investor in one the DEMO presenting firms we heard from on Wednesday: Integrien, whose software enables IT departments to predict and prevent service slowdowns and outage before they impact the business. Since the angel funding, Integrien has raised $17 million in two rounds of venture capital.
Cohn told me that the typical investment size for Tech Coast Angels in any single deal is between $500,000 and $750,000. He told me the basic requirements for membership are to, obviously, be an accredited investor, and that a referral from another member is the best approach. “The prospective member should add value in some way to the network,” he said. Members include service providers, lawyers, and others, but most are former or current C-level executives or founders of successful companies.
How does the group get together to look at deals? “Each network meets every two to three weeks for lunch, and once per month for a dinner meeting,” Cohn said. “It’s very consistent throughout the year.” He also told me that a new chairman (which is a voluntary role) recently took the helm. His name is Frank Peters, and he’s been the president of the Tech Coast Angels’ Orange County network. The cool thing about Frank? He has his own blog! You can find that link on the organization’s home page — it’s called “The Frank Peters Show”.
An angel who blogs — I like that.