Tech Coast Angels ACE Fund II Unlocks Investment Opportunities in Flyover States
Angel Fund realizes an annual 400% IRR with WeGoLook; acknowledges the "wisdom of the crowd" in angel networks
IRVINE, Calif. - February 16, 2017 (Investorideas.com Newswire) Tech Coast Angels' (TCA) ACE Fund II recently announced a very successful exit that was unique in three ways: the time to exit was very short (two years); the exit had a very high return (7.8x); and the company was based in the heart of flyover country: Oklahoma.
The West Coast and the East Coast US are known around the world as ecosystems for innovators: entrepreneurs, incubators, and unicorns abound--from Seattle to San Diego, from Boston to Boca Raton. Both coasts are where a disproportionate amount of risk capital--such as angel and pre-seed investing—goes into small businesses and startups.
But landlocked, flyover states also have terrific small businesses very worthy of private investment. Great companies and great deals can be found anywhere, say Dave Berkus and Raymond Chan, active investors in TCA's ACE Fund.
Berkus, superangel and author, met with the founders of WeGoLook when he was in Oklahoma to deliver a keynote speech to over 400 entrepreneurs at the invitation of the Oklahoma Angels and Oklahoma's venture fund, I2e. He was asked by the venture fund to review five companies, and within ten minutes of his meeting with WeGoLook's founders, he said, "I want to invest." The founders told him they were already fully invested and had closed the round.
But they were willing to listen, and by the end of the day, WeGoLook's founders liked what they heard from Berkus, and re-opened the round to accept another $100,000 investment from Tech Coast Angels' ACE Fund II. Within a year, the angel network had more than doubled its investment in the company.
WeGoLook is a platform or value exchange that connects individuals and companies with on-demand investigators or "lookers" to inspect or verify conditions in remote or inconvenient locations. Some examples are property inspections, auction item verifications and notary services. One major insurance company now uses WeGoLook's agents for accidents in areas far from a claims department.
Because investment opportunities between the east and west coasts are more rare and not inflated, WeGoLook had a very low pre-money valuation. In just over two years, the company was sold for over $42.5 million, and TCA's ACE Fund II members received a 7.8x return on their over $200,000 investment.
"WeGoLook's platform struck me as being so different and on target," said Berkus. "The attraction was so obvious; undervalued and yet very attractive. On the West Coast, this kind of deal would have been prevalued so much higher, and the exit would have taken so much longer."
Chan, managing partner of TCA's ACE Fund I, II and III agrees. "It is all too common on the two coasts, due to pressure and expectations for every startup to be the next 'unicorn,' for both a company and its investors to hold out for a longer time to offset a higher purchase price. Entrepreneurs and private investors in flyover states don't have the need—or the huge pressure—to have to hit a home run every time; they are satisfied with a base hit. And that means quicker exits for angel investors."
"Although one of our tenets in the ACE Fund is that we prefer deals that are quick to return, WeGoLook is very rare," continued Berkus. "Most angel investments take years. Seven years is what's considered an average amount of time to achieve liquidity. WeGoLook had an extremely successful exit in an extremely short period of time - just over two years."
"Becoming a member of an angel network helps an angel do the things you might not be able to do on your own," concluded Chan. "There truly is a wisdom in the crowd. Our members have expertise in so many fields and therefore, as a whole, our group can seek better opportunities—from syndicated deals with other angel networks and shared due diligence to expanding reach and discovering a great startup in a flyover state."
About Tech Coast Angels:
Tech Coast Angels (TCA) is one of the largest and most active angel investor networks in the nation, and a leading source of funding for seed-stage and early-stage companies across all industries in Southern California. TCA members are accredited investors who collectively invest in startup companies in the range of $250k to $2M as a group. The companies TCA invest in go through well-structured, transparent, and time efficient screening and due diligence. TCA members are themselves founders and executive level business leaders who have extensive knowledge in the investment process and world-class business practices. TCA members thus provide companies with more than just capital; they also contribute counsel, mentoring and access to an extensive network of investors, customers, strategic partners and management.
TCA is a catalyst in the growth of the thriving Southern California entrepreneurial ecosystem of innovation, funding mostly emerging technologies and life science companies. The most recent Halo Report rated TCA as #2 nationally in a number of funded deals. A recent analysis by CB Insights ranked TCA #1 out of 370 angel groups on "Network Centrality" and #5 overall in "Investor Mosaic." Since its founding in 1997, TCA has invested over $190 million in more than 330 companies and has helped attract more than $1.5 billion in additional capital/follow-on rounds, mostly from venture capital firms. For more information, please visit www.techcoastangels.com.
About Tech Coast Angels' ACE Fund:
TCA created the Angel Capital Entrepreneur (ACE) Fund as an investment opportunity to both accredited individuals and institutional investors. The ACE Fund provides investors with the opportunity to participate in a diverse pool of dynamic early stage companies selected utilizing the vast expertise and experience of the TCA and its membership. The ACE Fund focuses on companies with early exit potential providing investors with early liquidity. The ACE Fund also has a very low fee structure relative to other investments in this category. One of the most important benefits for members of the ACE Fund is access to deals closed to angel networks such as TCA because they may have been oversubscribed, or are from geographic areas not visible to TCA or its partners. For more information, please contact ACE2@techcoastangels.com.
For more information, please contact:
Kimber Smith Fidler
Tech Coast Angels
+1 (714) 267 0219
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