$20.4 million in TCA Investment in 2021 topped the record pace of 2020

Total investment for the year reflects the longest sustained level of high investment activity since TCA was founded in 1997 -- eleven years at $10 million or more

From 2011-2021, total investment each year was between $10.0 - $20.4 million

Three chapter funds and the target of a decision from the funds within 30 days of screening helped drive the high level of investment. TCA is working diligently to be the Best Place for the Best Companies to get funded

72% of investment was into new companies in 2021 (vs 75% in 2020)

With SBA’s PPP and EIDL grants and loans no longer available, we saw no significant increase in failure rates (relative to the number of exits) in 2021

TCA invested in 53 companies in 2021, including 40 new companies

This total of 53 includes 20 companies in Life Sciences, 13 in Software, 6 in Cleantech/Energy, 5 in Consumer Internet, 3 in IT Hardware, 2 in Financial, 2 in Food/Beverage/Agriculture, 1 in Consumer Products/Services, and 1 in Real Estate

New companies included 16 companies in Life Sciences, 12 in Software, 4 in Consumer Internet, 3 in Cleantech/Energy, 1 in Food/Beverage/Agriculture, 1 in Consumer Products/Services, 1 in Financial, 1 in IT Hardware, and 1 in Real Estate

Annual chapter funds brought significant incremental capital to entrepreneurs and diversification for members

A record $9.7 million from TCA’s three chapter funds fueled record total investment

43 of TCA’s 53 deals in 2021 received investment from at least one TCA fund

TCA now targets completing due diligence and making a fund decision within 30 days, after which individual members invest alongside the funds

Direct TCA member investment was $10.8 million - consistent with the average for the three years (2016 - 2018) before the advent of the chapter funds in 2019

The addition of the chapter funds has been a significant factor in bringing more capital to each company and more diversification to our members

2021 was a record year for Tech Coast Angels (TCA) in funding and member growth

TCA invested $21.4 million in a total of 53 companies across a diverse mix of industries -- showing that TCA continues to invest in both tech and non-tech companies

Life Sciences was the largest sector (39% of amount), followed by Software (22%)

40 of these companies were new additions to the portfolio and 72% of the dollar investment went to these new companies

Membership grew modestly from record-high 469 at the end of 2020 to a new record 581 in 2021, sustaining TCA’s leadership as one of the largest Angel Groups

Our members, with their extensive and broad industry experience, helped TCA invest with confidence in this diverse range of industries, which has al ways been part of TCA’s DNA

Of new companies added to the portfolio in 2021, Life Sciences, Software and Consumer Internet continue to lead.

Life Sciences has grown to 38% of the companies and 39% of the dollars invested. Within Life Sciences, the largest categories are Medical Devices (18% of the dollars), Medical Diagnostics (10%) and Pharma (8%)

TCA’s Angel Syndication Network (ASN) covers 60+ angel groups

These angel groups nominate their best deals to share with other angel groups for syndication

ASN hosts a monthly “virtual” web presentation. The purpose of these meetings is to help fill a round, expedite a closing, and save the CEO from extended road shows. The screening ses sions are open and viewed by accredited investors from these respective groups. So far, almost half of those presenting have received additional funding from these investors (totalling $13.1 million)

Collectively, the angel groups participating in ASN represent over 1,500 angels, and more than $1 billion in direct investment

This greater syndication activity through ASN coupled with virtual screening and remote due diligence has shifted the geographic mix to more companies based outside of Southern California in 2020 and 2021

Traditionally, the mix has been 85% - 90% in Southern California where TCA’s members can be actively involved in mentoring and governing.

With ASN, TCA is seeing more good deals that have strong support and local involvement by other prominent angel groups. Thus new investments outside Southern California rose to 53% in 2021 (from 36% in 2016, 28% in 2017, 24% in 2018, 25% in 2019, and 55% in 2020)

Under Covid-19, the shift to virtual screening and due diligence, coupled with the addition of virtual members across the USA, has allowed geographical diversification, with more than 50% of deals (including ones led by TCA) now outside SoCal

w TCA had a record 11 exits in 2021 and a 6.7x return on all outcomes since 1997

Procore Technologies (2006 investment) IPO’d (PCOR) for $10 billion and a 368x return -- the highest ever for TCA [the previous leaders have been Mindbody (264x), GreenDot (235x), Sandpiper (149x), Truecar (75x) and Companion Medical (58x)]

Findox (2016 investment) had an optional buyout at 12x and 64% IRR

Doctible (2015 investment) was acquired by PracticeTek and realized an 8x cash return plus a significant equity interest upside

Discover Echo (2016 investment) was acquired by Cellink for a 6x return and 33% IRR

Insight Medical (2020 investment) was acquired by Certara for a 4x return and 250% IRR

Cognition Therapeutics (2010 investment) completed an IPO (CGTX) yielding a 3x return

ControlTec (2001 investment) was acquired by Kindersystems for a 3x return

Habitu8 (2019 investment) was acquired by Arctic Wolf for a 2x return and 45% IRR

Spine Align (2020 investment) was acquired by a strategic for a 2x return and 100% IRR

Amplyx Pharmaceuticals (2008 investment) was acquired by Pfizer for about 1x

Haxiot (2018 investment) was acquired by Digi International for about 1x This brings the total outcomes since TCA’s inception in 1997 to 97 exits, and 128 shutdowns. Of the 502 investments TCA has made since its founding, 277 (55%) are still active. At the highest price achieved after IPOs, TCA’s return (assuming equal weighting) has been 6.7x and the IRR has been 26.1%. This compares to 2.5x and 22% benchmarks for angels per Angel Resource Institute. Tax benefits from the write-offs are not included in TCA returns. 7

TCA’s results make it clear that patience is required -- with largest exits happening after 5 years or more, and most failures occurring in the 3 to 6 year “Valley of Death”

Both the number of exits and shutdowns were high in 2021, and likely to shift towards more shutdowns in near future based on prior cycles

2021 had a record 11 exits and a near record 11 shutdowns (record was 13 in 2017)

Based on previous stock market peaks in 2000 and 2008, exit activity tends to surge just before peaking, followed by a surge in shutdowns just after the peak

If the current volatility leads to a (long overdue) bear market, we are likely to see less exits and more shutdowns in the next couple of years

TCA funding continues to be more likely when initial products/services are already developed and there is evidence of customer traction

58% of investments in 2021 were in companies with revenue and those seeking expansion capital, up slightly from 50% in 2020. This is driven by:

-- Companies are launching products/services earlier with MVPs (Minimum Viable

Products) before seeking investment

-- Investors at this later stage of the investment cycle expect companies to be closer to breakeven in order to survive the anticipated downturn

TCA’s investment focus continues to be on “seed” deals

70% of deals and 64% of investments in 2021 were Seed -- compared to 63% of deals and 65% of investments in 2020

Some of this bias towards early stage deals has been the pursuit of lower valuations associated with Seed activity, since later rounds have been increasingly at less attractive valuations

Series A represented 23% of deals and 19% of investments in 2021 (both up slightly)

In the past three years, there has been more follow-on investment in Series C & up

Most investments in 2021 continue to be either Preferred Equity or Convertible Debt that converts into Preferred Equity

The 43% invested in Preferred Equity was slightly less than the 45% in 2020 but not yet back to the level of 54% in 2016

However, the prevalence of convertible notes (42% of the investment total) remains concerning to some because it limits long-term returns due to 1) less initial lift in valuation before Series A and 2) fewer deals will realize Section 1202/Section 1244 favorable tax treatment

SAFE instruments rose to 12%, concerning since these are unfriendly to investors

Common equity investments remain rare in 2021, at 3% of the dollars invested

We are striving for greater diversity in our members and the background of our portfolio company CEOs, but we need to make more progress

15% of the CEOs who received funding this year are women

Two of our four Chapter Presidents are women

23% of the CEOs receiving funding in 2021 are non-white ethnicity ... we have a DEI initiative underway to improve

Valuations at time of TCA investment remain at historically uncomfortable levels -- this may reverse in 2022

32% of TCA’s investments in 2021 were in companies with valuations below $6 million, compared to 28% in 2020, 15% in 2019, 45% in 2018, 43% in 2017 and 61% in 2016

The median valuation was $8.0 million in 2020 and 2021, compared to $9.0 million in 2019, $6.0 million in 2018, and $4.5 million in 2016 and 2017

The long-term “sweet spot” for angel investing has been deals valued at $1-3 million --- this declined to 3% of investment from 18% in 2016

More on Valuation Trends ...

While median valuation for all deals was stable in 2021, it still rose slightly for new companies (and all seed companies) to $7.5 million from $6.5 million in 2020

Valuations for seed investments compressed at the top of the range (80th percentile) dropped from $11 million in 2020 to $10 million in 2021