An Evolutionary Year with a Strong Pipeline of Exciting Companies and Strategic Expansion Plans
IRVINE, Calif. – June 26, 2024 – TCA Venture Group (TCA VG) invested $10.9 million in a total of 32 companies in 2023, as stated in its 2023 Annual Report, announced today.
Eighteen (18) companies were new additions to the TCA VG portfolio, comprising 61% of funding. Investments were across a diverse mix of industries, with Life Sciences comprising 51% of the total investment. While the monetary amount of investment in 2023 declined from recent years, it still produced a strong year for the group, and the thirteenth consecutive year that TCA VG’s total investments have exceeded $10 million. This marks the longest sustained level of high investment activity since TCA VG was founded in 1997 as Tech Coast Angels.
A new expansion strategy was set forth in 2023 with the evolution of the angel network outgrowing its well-respected name of “Tech Coast Angels.” With ever-growing expansion and diversification into many industries and geographies far beyond Southern California, TCA VG extended its investments to include later stage seed and early A-round and B-round funding, and greater diversification with its four network funds. The new name, TCA Venture Group, reflecting these changes, was unveiled in January 2024.
“2023 has shown us that there is a strong pipeline of exciting companies with innovative ideas that need startup funding and mentorship, even in this challenging economic environment,” said TCA VG chair, Digvijay “Sunny” Singh, Ph.D. “In 2023, we took actions to extend our reach even more for the future – including expansion into hot new geographies, streamlined due diligence, stronger syndication, and providing a broader reach that incorporates tighter relationships at all levels, from accelerators to venture capitalists.”
TCA VG has invested $304 million in 544 companies since its founding in 1997. Since its inception, TCA VG has had 125 exits, and 156 shutdowns. Of the total number of investments, 263 companies (48%) are still active. Assuming equal weighting, the cumulative return for all TCA VG outcomes is 5.8x returns and IRR is 23.7%, exceeding the 2.5x return and 22% IRR benchmarks from the Angel Resource Institute.
At the end of 2023, TCA VG was comprised of five networks: TCA Los Angeles, TCA Orange County, Pasadena Angels, TCA Inland Empire, and MEDA Angels. There are four annual network funds that invested $5.7 million of capital into 26 of the 32 deals funded in 2023. Drops in late stage exit activity and IPOs, as well as VCs supporting their existing portfolio companies, meant that TCA VG individual member and fund investments filled a gap for promising young companies seeking investment. Early stage investment groups such as TCA VG contributed a larger percentage of funding in 2023, with VC investment shares dropping from 54% in 2022 to 10% in 2023.
TCA VG realized three exits in 2023. Among these, DTx Pharma reached unicorn status and was acquired by Novartis for $1 billion, netting earliest TCA VG investors an 18x return. TCA VG (including two of its annual network funds) invested over $2.5 million in the company, so many members participated in this positive exit.
TCA VG continued to be active in syndication through Angel Syndication Network (ASN), which TCA created in 2015. ASN now encompasses more than 60 angel groups and 1,500 angels, and in 2023 ASN funded $5.1 million in ten (10) companies. A majority of all TCA VG’s 2023 investment (59%) and deals (54%) were outside the group’s historical focus of Southern California. This change is due to the growth of ASN, the shift to virtual screening and due diligence efforts, TCA VG’s licensing initiative bringing in groups in other parts of the county, and the addition of virtual members. Southern California still represented 41% of investment and 46% of companies, with other notable geographic clusters being Massachusetts (13%/9%), New York (10%/11%), and Northern California (7%/3%), respectively.
Some tips for entrepreneurs included in the annual report are:
- Be realistic about valuation. Attracting investment will be difficult, so raise as much money as you can in the current round without concerns for dilution.
- Seek investors who can provide guidance and contacts as well as well as funding. And listen to them.
Some tips for angels/investors included in the report are:
- Accelerate funding companies who embrace realistic valuation, and can achieve breakeven with current round funding.
- If you have a limited amount of capital, invest in funds in order to diversify. Supplement this with investing directly in areas/industries where you have experience.
Access TCA’s full 2023 Annual Report for more details. The 40-page report includes a summarization of the year, greater detail on the strategy for expansion, more information on topics mentioned above, a list of 2023’s new and funded companies in TCA VG’s portfolio, many more trends and comparisons, and tips going forward for investors and entrepreneurs.
About TCA Venture Group:
Founded as Tech Coast Angels in 1997, Tech Coast Angels Venture Group (TCA VG) has invested approximately $280 million in more than 544 companies, attracting an additional $2.2 billion in capital. TCA VG is a key seed and early-stage funding source, with more than 400 accredited investors in seven member networks: TCA-Los Angeles, TCA-Orange County, TCA-Inland Empire, TCA Southeast, Pasadena Angels, MEDA Angels, and Pegasus Angel Accelerator. TCA VG members, including founders and business leaders, deliver more than capital — providing counsel, mentorship, and access to extensive networks.
Connect with TCA VG on its website, X/Twitter, Facebook, and LinkedIn.
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