tech coast angels what is tca? why might you care? what you need to know if you do
TRANSCRIPT
What is TCA?
An Angel is an investor in a startup. Angels invest before Venture Capital and
after Friends, Family and Fools. TCA is the largest Angel group in the US
and has 5 groups in southern California. It is a dating service. It does not invest.
What is TCA?
300 members, in SD, OC, LA, Ventura and Inland Empire.
SD is largest group with >100 members and is the most interested in hardware/software.
SD also has a strong BioTech interest. Most members are NOT technical. Goal is to make BIG $$$$ on Exit
So, You need $$ for your startup
There are no rules (no fixed criteria). He who has the gold, rules. Angels do not invest in ideas. You need
more than an idea. Raise $100K to $2M in $25K chunks.
So, You need $$ for your startup
Investments are not made in companies, they are made in
PRESENTATIONS.
Process
Apply via website Pre-screening Screening Due diligence (1 to 6 months) Dinner (5 times) $$$$$$$$$$$$$$$
Pre-Screen
Applications are reviewed monthly. Application are first screened to remove
perpetual motion machines and others that we think won't have a chance.
May get referral
Pre-Screen
Applications are reviewed monthly. Application are first screened to remove
perpetual motion machines and others that we think won't have a chance.
May get referral
Pre-Screen
Rejections due to us, application, applicant and “Can the applicant put on a good presentation at the screening next week?”
Presentation is informal Company can come back
More on rejection Lack of team (Who's the CEO? Can he
make this happen? Can they market this thing?)
Lack of experience Lack of communication skills. Lack of market knowledge. Unable to explain what in the hell the
product is!
Screening
Held a week after pre-screen. Presentation is formal. Goal is to get interested people to do due
diligence.
Diligence
If you are prepared, organized and anticipated questions (and have the answers), may be done in a month.
If not – IP status, Capitalization, Market,
Technology
Presentation Outline
Your background? Company's product/service? Description of technology Status of Technology (patents, demo) Market size, description and barriers. How you are going to market.
Presentation Outline
Exit – Who, What, When, How How much money you need and why. Are there mile stones that might be used
to effect funding options? What is your pre-money (How much is
your company worth today)
Presentation Pitfalls
Planting an idea that you then have to correct. (Very easy to do!)
Lack of organization. Assuming that the audience can read
between the lines. Although the audience has a technical
education assuming that it is technical.
Good Presentation
Covers the subject. Demonstrates the knowledge and
competency of the presenter (CEO). Presenter answers questions as if he
understands the question, is not surprised by the question and is the world's expert on it.
Presenter is coachable.
How Companies Fail
Suicide. Spend money foolishly. Believe that if 1 pregnant women can
have a baby in 9 months, 9 pregnant women can have a baby in 1 month.
Try to have a appearance of an established company without actually being established.
How Companies Fail
Create nationwide sales department (with no product to sell).
Buy stuff that a 'real' company needs, but it doesn't (yet).
Create employee handbook. Get nice write up in local paper (even
though it has no customers in town, in the country or product to sell).
Preparing yourself
Hang around business people. Attend meetings where business issues
are discussed. (They are interesting.) Listen to business people talk, the
questions they ask, the answers they give.
Develop a business vocabulary. Give presentations