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SoCal PE Group
We’ve been investing in software companies since 1996 and our focus is on two types of companies.

AI Software Companies and Healthcare Startups with less than $1 million in annual revenue and gross profit margins of at least 80%.

Growth Companies with Annual Revenues Between $5 million and $15 Million growing at 10-20% per year.

INVESTMENT CRITERIA

SEED & STARTUPS | GROWTH COMPANIES

Must Haves For Your Business

  • AI industry agnostic or healthcare specific software
  • Unique, innovative, and disruptive
  • Addresses a large market need or opportunity exceeding $50M ARR
  • Potential for rapid growth and scalability

Founder(s)/Team

  • Experienced and capable founder(s) with relevant domain expertise
  • Passion, drive, and commitment to the business
  • Ability to execute and adapt to changing circumstances
Market Opportunity

  • Large and growing addressable market
  • Competitive advantages and barriers to entry
  • Clearly defined target customers and market positioning

Business Model

  • Viable and sustainable revenue model
  • Potential for 80% + gross margins and profitability after no more than 3 years
  • Clear path to monetization and revenue generation

Technology/Product Development

  • Proprietary technology or intellectual property
  • Realistic development roadmap and milestones

Traction

  • Early customer or user adoption of at least one company
  • Promising initial traction metrics (revenue, users, pipeline, etc.)
  • Validation of the product-market fit

Funding Requirements

  • Reasonable funding needs and proper use of funds
  • Capital-efficient operation and spending plan
  • Potential for follow-on funding rounds

Exit or Long-Term Hold

  • Attractive potential exit opportunities (acquisition, IPO, etc.)
  • Scalable business model for venture returns
  • IRR of 18%-28% for < 5 year exit or 12% to 15% IRR for a long-term hold

Valuation

  • Shall be calculated & modeled on a risk on formula based on annual growth rate, GPM, NPM and trajectory thereof
  • Investor rights and protections
Advisory and Board of Directors 

“Fractional Positions Are Acceptable”

  • For seed money and start ups, it is mandatory that we have at least two board members
  • CTO 
  • CFO
  • CMO
  • Minimum of three vertical/domain specific advisors