Sponsor Spotlight Interview: President of Tech Coast Angels Orange County

Tech Coast Angels is an important part of the Orange County tech startup ecosystem, and a Gold Sponsor of the OC Startup Council.

Enjoy this exclusive interview with Hicham Semaan, President of Tech Coast Angels Orange County, to learn more about what they do and how their work is helping local founders and startup companies succeed in Orange County. 

OCSC: Who are you and what is your title?

Hicham Semaan: Hicham Semaan, President of Tech Coast Angels Orange County.

OCSC: And what is Tech Coast Angels?

Hicham Semaan: Tech Coast Angels is one of the largest angel groups in the U.S. An angel group is a group of individual accredited investors who come together to support one another in making decisions and investing in the startup community.

OCSC:  What does TCA offer startups?

Hicham Semaan: Tech Coast Angels, and angel investors in general, mainly offer startups funding and expertise.  Most angels come from varied backgrounds—whether they're corporate professionals, or entrepreneurs themselves, or CEOs, or serial investors. And so they bring not only their capital to be able to help fund the startup, but also their expertise on how to raise funds, how to manage a company, how to build a team, how to navigate difficult waters, and so forth.

OCSC: Excellent. And how did you become president?

Hicham Semaan:  I sold my tech company back in 2012 and then stayed with the public company that purchased us for a couple of years. Then after that, I partially retired and started doing some bucket list items. Then a friend of mine, who was in a CEO Round Table with me, suggested that I'd be interested, and kind of intellectually stimulated and challenged by the startup community and the angel investing space.  He introduced me to Tech Coast Angels. After joining TCA, I quickly dove in leading some deals and investing in multiple companies. And soon after that, I was asked if I'd be interested in helping to drive the vision of Tech Coast Angels a little bit further,  especially since I had some specific directions that I wanted to see Tech Coast Angels move.

OCSC:  What would you say is the mission of Tech Coast Angels?

Hicham Semaan:  We discussed that in our recent strategic planning process and it's really twofold because we've got two main constituencies. One is the entrepreneurs that we invest in and we support. And the whole goal there is to help grow and support the ecosystem—help generate jobs, help grow companies.

But ultimately, we're a member-driven organization.  Member needs fall into a few buckets. Number one is looking for a structured way to invest in the startup community better than individuals could do on their own. And then kind of peripheral to that is the engagement with smart, talented people, the education of seeing what's going on in the marketplace, the latest technologies, the innovations. And lastly, maybe most importantly, the social aspect of getting to know like-minded people here in Orange County.

OCSC: What types of investments does TCA offer to local founders and startup companies?

Hicham Semaan:   Tech Coast Angels invests in early stage companies anywhere from early pre-seed to Series A financing rounds, sometimes even beyond that. But our bread and butter investment stage is seed stage.  That would typically be a company that's beyond its initial formation stage. They've probably raised some money from friends and family to create the business, maybe generated some products or found some customers. And now they're looking for some early growth investment to help build out the team or expand their customer base and grow their revenues.   

Our seed stage investments are usually somewhere between the one to three year stage of a company, usually somewhere between half a million to a million and a half dollars of capital being raised, with valuations usually somewhere between $2 to $5 million. That's kind of the core bread and butter sweet spot of seed stage investing. And like I said, we're sometimes active a little bit before that and sometimes a little bit after that. 

OCSC:  Are there specialties, or an industry, or life cycle stage focus for Tech Coast Angels investments?

Hicham Semaan: Not necessarily, at least not from an investment thesis perspective. We tend to have the most expertise in our membership around tech and medical devices and life sciences. But we see startups in retail, we see agricultural, and e-commerce deals. We see the full gamut and we're open to seeing the full gamut. I think what keeps angel investing interesting is being able to see the diverse types of new ventures out there.

OCSC:  How long does the TCA investment process generally take for a founder looking for funding?

Hicham Semaan:  The first stage is completing an application that can be found on our website. Then you'll go through our Pre-screening process. Then if you clear the Pre-screen, you get to Screen in front of our members. And then at the Screening, if there's enough interest from our members that want to move the opportunity along, then you'll move into Due Diligence. And then if you pass Due Diligence, we move forward to Funding.

That whole process from application to funding could take as little as 60 days. But typically, it takes three to six months just depending on when you apply, how soon you get scheduled, what the backlog is, and how quickly you're able to move through the different stages.

OCSC:  You addressed this a little bit in a previous question, but what are the typical amounts funded?

Hicham Semaan:  We've funded companies that are looking for as little as $100-150,000 up to I think our largest Tech Coast Angels deal was $6 million. So it runs that full gamut with the sweet spot being probably somewhere between half a million to $2 million.

OCSC: Why should founders consider TCA as a funding partner?

Hicham Semaan: Oh, that's a great question. I think if you're looking purely for capital, then the angel investing route might not be the ideal route.  But if your company could benefit from the network visibility, the network access, and the expertise within the angel community and our angel members specifically, then raising funds through angel networks, and more specifically through Tech Coast Angels, I think is the ideal scenario for a company raising funds.

But if you're looking for just capital, I usually direct people to friends and family first. And then when you need added expertise and support and scalability, then you start moving into either angel networks, or if you're a large enough or your startup's valuation is high enough you can move up to VC (venture capital) firm channels.

OCSC: What are some specialties, or differentiators that demonstrate why entrepreneurs would want to work with the Tech Coast Angels?

Hicham Semaan:  Tech Coast Angels has been around for over 20 years.  It has a large number of members as the largest or one of the largest angel investor groups in the U.S., approaching 500 members. That's a lot of visibility, a lot of access to expertise.  Tech Coast Angel members’ experience can help entrepreneurs identify pitfalls and challenges before they become major issues.   That expertise as investors and as partners is of tremendous value. Not to mention the access to capital and the network to access further capital for future financing rounds. 

OCSC:  Anything else you'd like to share - maybe things that people don't know about TCA?

Hicham Semaan:  Yes, we are also launching a new annual OC Chapter Investment Fund.  Startups will now be able to go through the process and essentially be guaranteed up to half a million dollars if they really impress the membership. That's something that wasn't part of our services before.

OCSC: How does this differ from the traditional TCA investment review?  Is it kind of a fast track approach?

Hicham Semaan: Yes, the new fund approval procedure is an organized decision making process with guaranteed funding that we didn't have before. Before, if you impressed the members, then each member would have to go through their own decision making process and then fund individually. 

With the new TCA chapter fund if enough members simply vote to support an investment, then the investment is made.  It's simpler, faster, and I think it's going to be a tremendous tool both for the members in diversifying their portfolios and investing in more companies.

But it's even more important for entrepreneurs to be able to come pitch Tech Coast Angels and know that if they have interested the members enough, they're going to get a known amount of funding within a certain and shorter timeframe.

OCSC:  What is the best way to connect with TCA? 

Hicham Semaan:  The best way to get in touch with us is the TechCoastAngels.com website. It has information and applications for both new investor members and for entrepreneurs looking to raise funds. I'd also recommend checking with your personal network, your LinkedIn network or other networks, to see if you already have connections to Tech Coast Angels members. It would probably help to expedite the process and to help you navigate the waters and understand the process before diving in.

Thanks to Hicham Semaan for sharing how Tech Coast Angels works with startups here in Orange County.

And, thanks to Tech Coast Angels for their Gold Sponsorship support of the OC Startup Council and our efforts to accelerate Orange County’s tech ecosystem.

To learn more about Tech Coast Angels, please visit their website at TechCoastAngels.com.