Gaininga Foothold
Angels give lift to a local company’s shoe insoles When Thomas Pichler decided to launch his company in 2002 (in the shadow of the dot-com crash), big-time investors weren’t racing to put their money in untested shoe supports. “The bigger venture capitalists who like to give a few million were pretty much dried up,” says Pichler, chief executive officer of Orthera, a manufacturer of medically engineered orthotic shoe insoles. “If your friends and family don’t have a lot of money, you’re basically looking for angel investors.” Pichler found one in TCA. Orthera’s insoles offer an affordable alternative to the pricey custom shoe orthotics prescribed by doctors, which, though effective, are rarely covered by health insurance and “can cost anywhere from $200 to $600, and that’s a lot of money,” Pichler says. Orthera insoles cost around $15 a pair. Pichler’s initial pitch to TCA in 2004 was well received but did not result in funding for the Harvard Business School grad. Undeterred, Pichler stayed in touch, providing TCA with updates every couple months. He took their advice to heart, building the business and his client base before interviewing with TCA a second time. “They went through all the levels of due diligence, talked to different customers, looked at the books and everything around it,” he says. In the end, TCA invested $250,000 in Orthera, allowing Pichler to grow his business. As a condition of his recently inked contract with one of the largest warehouse retailers in the U.S. (which Pichler chooses not to name), Orthera moved its production stateside from Colombia. It also went from fewer than 20 employees to about 100 at its production facility off Miramar Road and Interstate 15. “We’re probably (making) three or four times last year’s revenue,” Pichler says. “We’re probably one of the fastest-growing companies in San Diego right now.” orthera.com
AScent totheTop Fledgling fragrance innovator passes the smell test
In 2007, the budding San Diego fragrance and flavor ingredient manufacturer Allylix wowed a group of local TCA members—so much so that they encouraged members of the Pasadena Angels and the Life Science Angels (not part of the TCA) to join them in investing more than $3 million in the company. “That was the key funding round for us to be able to start scaling up our platform and getting our products closer to market,” says Allylix’s chief operating officer, Carolyn Fritz, who joined the company in 2004. In 2010, TCA spritzed another $2 million at Allylix as part of a venture capital round of nearly $9 million. “Not only did they give us a good, solid initial investment, but were there to help us continue to build,” Fritz says. With 22 employees and a research facility in Lexington, Kentucky, Allylix manufactures a class of organic compounds known as terpenes, which are produced naturally by a variety of plants. While terpenes are found in oranges and grapefruit, extracting them from citrus is expensive. Allylix produces its terpenes more economically, using yeast strains fermented in stainless steel tanks. Its first two terpene-based products, valencene and nootkatone, are used in the manufacture of products ranging from citrus-flavored sodas to household cleaners and to high-end perfumes. The company is currently developing a replacement for DEET, an active ingredient in insect repellents that can cause skin irritation and has been linked to seizures. “We believe there’s a significant opportunity to provide substitutes that are safer and equally effective,” Fritz says. allylix.com
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