Angel Investors: Thoughts on COVID-19

Tech Coast Angels president and chairman emeritus Grant Van Cleve recently told the Business Journal that he would continue to make investments amid coronavirus-related uncertainty. 

Van Cleve is one of the more active angel investors in the state. He is also actively fundraising for e-commerce product firm Buy It Installed in Irvine (see story, page 10), where he serves as executive chairman, and is raising funds for his newest endeavor: a venture factory called Hangar 75, also based in Irvine. 

TCA member and OSEA Angel Investors founder Xandra Laskowski said her angel investor group has postponed pitches for the time being, and is focused on establishing connections for future deals.

She added that investment will likely resume after capital markets have stabilized and public companies can provide insight into growth in their markets in coming quarters.

Only then can entrepreneurs determine realistic valuations, she said.

TCA’s newly appointed President David Friedman, on the other hand, believes that a reset in valuations may be coming.

Rising valuations have been a problem cited by many investors, both angel and venture capitalists, in recent years. 

“We want entrepreneurs to be realistic,” Friedman said. 

“Now that money is scarce, valuations will have to come down … That’s a good thing for angels and entrepreneurs, even though entrepreneurs might not agree with me. Ultimately, the goal is to move forward together and the difference between $4 million and $6 million (in valuation) is irrelevant when you get to an exit.

“The current economic conditions may set a different standard that helps people come together over more realistic numbers. So I’m hopeful for change in that way.” 

—Jessie Yount