Where Tech Coast Angels Tread, And Why

12/24/08Follow @xconomy

Jack Florio fits the casting profile of the kind of guy Hollywood might see as an angel investor. He has 30 years experience in the pharmaceutical business, much of it in management jobs at pharma giant Eli Lilly. He’s got the experience to offer advice to a younger entrepreneur, and the Rolodex to make key introductions with old pals in Big Pharma. He even looks the part of an energetic elder statesman, like a less-tanned version of actor George Hamilton.

I had an interesting talk with Florio, the vice president of marketing and communications for Tech Coast Angels, on my trip to San Diego a few weeks ago. This is a follow-up to the story Bruce wrote in October, based on an interview with the angel group’s president, Michael Elconin. One recent investment from the group in San Diego-based MicroPower Appliance caught our eye. It’s aiming to to develop a battery-powered Wi-Fi video camera.

At a Starbucks at the University Towne Centre mall on La Jolla Village Dr., I asked Florio what the angels get out of doing this sort of thing. The group has put more than $100 million to work in a variety of 150 different startups across a broad range of technology and life sciences ideas. The angels have a variety of motives. They want to put their experience to work, but not necessarily in the everyday pressure-cooker of running a company. They want to stay mentally engaged with a variety of interesting concepts. They want to meet some of the brightest, hungriest young entrepreneurs around. They want to keep their valuable contacts in industry fresh. They want to get in on the ground floor of promising investments too, but Florio made that sound kind of like gravy.

“We don’t want people to come to Tech Coast Angels if you just want money,” Florio says. “We have an interest in getting involved with companies.”

Each member of the Tech Coast Angels is asked to make two investments a year for about $25,000 apiece, and get involved with due diligence and joining company boards. The group will put in as little as $200,000 into a company, or as much as $1.5 million to $2 million, Florio says. Like a venture capital firm, the group puts a heavy emphasis on outlining short-term milestones companies need to reach to create the sort of value that will lead to the next round of investment.

“We think our money, contacts, and expertise will enable companies to raise that next round of venture capital,” Florio says.

About one-fourth of the members of the group turn over each year for one reason or another, usually because they run short on time, Florio says.

Apparently, there’s an ample supply of people willing to fill those openings, because of all the veterans from Qualcomm, Hybritech, other pioneering companies from the San Diego area, Florio says. There are probably 30 to 40 people like himself, retired from Eli Lilly, in the San Diego area alone, looking to stay active. Combined with the research centers at the University of California, San Diego, The Scripps Research Institute, and San Diego State University, he doesn’t see any shortage of promising ideas for angel investment, or people willing and able to back them.

“You really have a collaborative environment here,” Florio says. “It’s much more collaborative than other places I’ve been.” He added, “For us, this is really about making something happen in the community. We want to see San Diego grow, and we want to be a part of it.”

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