South Coast Angel Network (SCAN) is a member-run organization of active investors. SCAN facilitates the introduction of entrepreneurs to potential investors through presentations and other mechanisms. SCAN consists of individual angel investors interested in financing privately held companies or ventures typically in an early stage of development. Membership in SCAN is a privilege, which is subject to renewal, revocation, or termination for a member’s failure to conduct him or herself in a manner consistent with this Membership Agreement and SCAN Bylaws.
Being part of South Coast Angel Network provides investors with many advantages including:
- Increased deal flow to top emerging companies across a broad range of industries
- Improved deal terms as a result of investing collectively
- Introductions and access to deals of 9 other angel groups through the Alliance of Texas Angels Network (ATAN)
- Opportunity to work as a team to evaluate and learn from each other during Due Diligence
- Association with a premier angel group in Texas and its membership of successful Texas entrepreneurs and business leaders
South Coast Angel Network is not a fund and does not invest as a group. Members collaborate on due diligence and pool their investment funds to create critical mass. Each member, however, makes individual investment decisions and understands that investments in early-stage, privately-held ventures are risky and can be highly illiquid. Typical angel investments can take years before capital is returned and, in some cases, the company goes out of business and no money is returned.
South Coast Angel Network members must be accredited investors who agree to be active participants in the group. The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:
- A bank, insurance company, registered investment company, business development company, or small business investment company;
- An employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
- A charitable organization, corporation, or partnership with assets exceeding $5 million;
- A director, executive officer, or general partner of the company selling the securities;
- A business in which all the equity owners are accredited investors;
- A natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
- A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
- A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
Members of South Coast Angel Network should be willing and able to make a minimum investment of $5,000 per year. However, this investment is not a requirement for membership.
South Coast Angel Network is a member-managed group and active participation by members is strongly encouraged throughout the investment process. Participation can be in areas such as:
- Sourcing deals
- Screening potential portfolio companies
- Monthly meetings with company presentations
- Due diligence efforts
- Monitoring portfolio companies
- Board service
- Mentoring entrepreneurs
- Educating others about angel investing