TCA Spring 2021 Community Newsletter

TCA San Diego Community Newsletter – Winter 2020

As we’re finally ready to wrap up this surreal year, it’s worth a moment to take stock of what we’ve lost, what we’ve gained, what we’ve learned, and how we’ll adapt.

We entered 2020 primed for TCA’s biggest and most active year yet. We did, in fact, achieve those goals, though we never could have imagined how they would come to pass.

Our ACE 20 Annual Fund was extremely active at the start of the year – we invested nearly $2.6M before COVID-19 changed everything. Even with a complete halt of our in-person activities, we invested another $800,000 in the two following months.

Adapting to the new normal, we embarked upon a massively successful shift to 100% virtual operations including happy hours, educational seminars and even dinners! Meetings saw record attendance, deal reach expanded, and engagement spiked, as we discovered the benefits of convenience and removal of physical barriers – though we dearly missed the camaraderie and spirited discussion of a room full of friends and fellow investors!

On the subject of friends and investors, TCA-SD continued to grow at a rapid pace, with a 25% increase to more than 260 members! Thanks to this influx of new members, we were able to blow past our ACE 21 Annual Fund fundraising to a total, new record raise of $4.7M! In all, TCA-SD invested $11M in 2020.

We’re well-positioned for the future thanks to our progressive leadership, strong and diverse membership, and generous community support. Our mission to be the premier angel group has only advanced over the past year, and we are excited about our opportunities to help startups thrive in the post-COVID world we will hopefully be entering soon!

– Your Friends at TCA – San Diego

Read the rest of our newsletter here!

TCA San Diego Community Newsletter – September 2020

Our September Community Newsletter is out, announcing our $4.3 million annual fund, our hard science pitch competition at San Diego Startup Week, and community events and resources for entrepreneurs and investors!

TCA Community Newsletter – July/August 2020

The July/August 2020 Community Newsletter is out! Come see what’s new with TCA, read about all the happenings in the startup community, and check out the interesting events and webinars that are taking place this month.

TCA San Diego Community Newsletter – May 2020

The May TCA Community Newsletter is out today! Featuring a special message from TCA San Diego President Caitlin Wege, our 2019 Annual Report as well as our latest COVID-19 resources, community events, and more!

 

 

Leadership for the Pandemic and the New Normal

By Dan Rosen

The COVID-19 Pandemic has caused every startup to assess how to survive and plan to thrive in the “new normal.” No one knows what the new normal will look like, but based on other jolts to our economic system, we do know that life after this pandemic will be different than life before – at least for a while.  Just as there is no natural immunity to the Covid-19 virus, there will be no immunity to the economic disruption that results.

As I previously posted (see http://blog.drosenassoc.com/?p=140 and http://blog.drosenassoc.com/?p=145), startups need to act  while they can to survive, pivot (as appropriate), and figure out what unique things each business can do to solidify their future.

This is a test of leadership.

Most angels cite the team as number one thing they look for in their investments.  The critical role of dynamic leadership is more important in this time of unprecedented upheaval and startup survival threat.

Founders and CEOs must maintain team enthusiasm in the face of societal and personal hardships now more than ever.  While maintaining team cohesion, startup leaders also need to motivate their investors to stick with them and subscribe to their changing vision.  Both founders and their investors are in this to create great companies that lead to great exits.  Ultimately future investors and acquirers will judge and value the enterprise based on how well it adapts to this new normal.  But, of course, there is no company to value if it runs out of cash before it gets to an exit.

As I’ve spoken with many startup CEOs, I’m finding that they seem to fit into one or several of four categories.  These are:

  1. Immediate action.  These CEOs (generally guided by either their own experience or that of an experienced CFO who has experienced previous downturns) see that cash must be conserved with a potential path to becoming cash flow positive.  They tend to involve their entire employee team into the conversation and take rapid action to conserve cash.  They often have a company that already has some cash flow, so balance the reduced cash flow with cuts to stay alive and potentially thrive.  Given that cash balance is finite, early cuts have a bigger impact than later ones; this is similar to the response to Covid-19, where earlier actions seem to have more effect in preventing widespread infection.
  2. Benefit from the “New Normal”.  There truly are some business that will benefit from the disruption.  A clear example is Zoom, which is blossoming as we all need to move to videoconferencing.  Or, one of my portfolio companies, DocuSign that has enabled transactions to still be done virtually.  Some clever entrepreneurs have quickly pivoted to provide a piece of critical infrastructure for businesses to reopen safely.
  3. Wait and see.  Some CEOs decide to wait to understand how bad their situation will be before taking action.  They might have considerable cash in the bank – they believe sufficient to weather the storm.  And, guided by their prior experience, believe that when cash get low, they will have achieved milestones that allow them to raise more cash.
  4. Denial.  These CEOs believe that, while things look bad right now, their business will turn around and go back to the way things were before.  In some cases, they were in the middle of raising institutional money and believe that the money will come (it might).  In some cases, there is a logic that says if every one of my competitors cuts back, but I continue to move forward, then I will be the biggest winner when the market does turn.  There are probably some businesses that will do well in the “new normal” but I doubt that it is as many as think that they will do well.

The purpose of the above discourse is to point out that there are many different paths to leadership in this tumultuous time.  No one path is always correct, and most leaders will use some elements of more than one.

Over the next few weeks, I will talk with leaders who I believe, through their actions, have demonstrated exceptional leadership in the face of what could have been a company destruction.  I believe that their examples will serve to illustrate why we invest in startups and be a guidepost for others to adopt best practices.

Dan Rosen is the Chairman of the Alliance of Angels, former Director for the Angel Capital Association, and a Tech Coast Angels member. He has a Ph.D in Biophysics from UCSD.

TCA Community Newsletter April 2020

Check out our mid-month update here!