Members of Tech Coast Angels, the nation’s largest investor group in early-stage companies, put their money during 2007 in half the deals they had in 2006.

The 290 members of the Laguna Hills group are all Southern Californians, and most of their portfolio companies are in Southern California too. After investing in 23 deals in 2005 and 20 in 2006, members invested roughly $10 million in 10 deals this year, maybe 11 when all the books close.

The dollar amount is only off slightly from 2006, so members, who invest individually rather than pool their money and have the group make the investment, were putting more money into fewer companies.

“This is a surprise to us too,” said Frank Peters, chairman of the board of governors for the entire organization. “It kind of snuck up on us. I didn’t realize until I saw these numbers that we were doing fewer deals. Is deal quality a problem? Is it member fatigue? Are the members becoming increasingly choosy?”

It may just be part of equity investing’s life cycle in which the Angels were putting more money into companies already in their portfolios in order to help them grow to the next level.

Read my story about Tech Coast Angels here.

This entry was posted on Saturday, January 5th, 2008 at 5:51 am and is filed under Angel investing, Local companies. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.