DailyJim: From angel investors to angel employers and all the angels inbetween

Hello everyone, welcome to another Daily Gym. Today is Wednesday, September 25th, 2024. And today I want to talk about from angel investors to angel employers and all the angels in between.

So, I'm not sure if you're familiar with the concept of an angel investor, but the idea is that when somebody is trying to start a company, they often need funding to start the company. And to even grow the company people need funding they need investment and angel investors are often the ones who come in right at the beginning when the company and its purpose and its products and everything are very ambiguous but there is potential and so angel investors typically come in and they give that support financial support but they also give business support mentorship in other ways, etc.

There, I think, are also other types of angels that exist, in using this metaphor. I think if somebody is starting a non-profit organization, there are also angel donors. These are the ones who come in the very beginning, again, when the non-profit is not very clear on how it's going to proceed with its operations, negotiations, not very clear on what its long-term funding strategy is, but again, has potential. And I think these angel donors come in and they provide momentum. They get the ball rolling. And again, I don't think it's just with the money, but it's also with coaching and perspective on where things might go. But also giving that support, giving that moral and emotional support showing that it's possible, believing.

I think you also have angel customers. And so if you think about a company that is starting, it could be a restaurant. These are the people who come out and support the restaurant in the beginning. They're the ones who are the first to stand in line. Maybe think of the iPhone. The new iPhone comes out. They're the early adopters. They're the ones who are coming and believing when things are still very new, still very fresh, not sure how the product is going to play out in the future, but really wanting to test it out, really wanting to experiment with it and contribute money to do so. So again, it's not just about the money. It's the money. It's the feedback. It's the belief that they can contribute.

Now, this is when I come to this idea about an angel employer. lawyer. Okay, so we have angel investing for companies we want to create. We have angel donors for non-profit NGO organizations that we want to create.

Angel customers for products we want to create. But what about the jobs that we want to create? What do we have for that? So what about this concept of an angel employer? Someone who believes that this job has a lot of potential. It's still very early stage, not sure how it's going to play out, not exactly sure what the job description is, not exactly sure what the budget is, not exactly sure who is going to employ this job in the future or how and what the mechanisms are. But again, providing the financial support, providing the emotional moral support and the belief and also the mentorship and the coaching and feedback on helping to refine the job as it grows.

So I think this has been a lot of the concept of what I've been thinking about the last couple days. This idea of if we want to create jobs in the world, how do we go about the process? And maybe there already is a process that we could learn from the startup world or from the entrepreneurship world or restaurant creation world or the creation of any new product. I used to work in innovation consulting. It talks about the adoption curve. And they say it's like an S-curve and it's like early adopters and lots of different names for people along the stage. But I believe another way to look at it is angels are the ones who are the early adopters. It's kind of a nice, very good connotation term for people who take the leap to try to make something new happen in the world. And so we can step back and, okay, so let's look at how angel operations typically function.

So when it comes to angel investors, it tends to be individuals, and it tends to be individuals giving a lot of money, and it tends to be actually by law in the U.S. to be an angel investor. I believe you have to be considered an individual of high net worth, which is something like over $250,000 in annual income or maybe a million dollars in savings somehow.

So often that is restricted to really financially well-off people.

They did try to experiment a little bit with crowdfunding or crowdsourcing investments like this. I'm not sure how it's gone. I think it's kind of ebbed and flowed. I think there's a lot of excitement for it, but I don't think it really took off so much. Okay, and then second, let's look at angel donors. I'm not really sure how this plays out. I imagine, again, it's probably from high net worth individuals who have the money to contribute to start these nonprofits. Often it's friends and families who give money, but not all friends and family. It's maybe a handful of people who give the seed funding. And sometimes maybe this is just the nature of starting something new is that most people don't believe, but a few do believe. And if those people have the financial or other resources to contribute, they do. So I don't want to give you the impression it's only financial.

But if we look at angel customers, yes, there's the customer who is, if you're starting a consulting firm, like one of the ones I worked at, they had a main customer who was their first customer and who really enabled them to take off and get more customers. Because at the end of the day, the goal of angel investing, the goal of angel donor, being an angel donor, the goal of being an angel customer, and I would say the goal of being an angel employer is to increase the numbers or is to change to see how it grows. So if you're an angel investor, the idea is that there will be more investors in the future or investors at a much higher rate. So maybe it goes from being one, two, three, four investors to 50 investors, or it goes from one, two, three, four investors to one really big investor. This idea of being acquired, which happens a lot. These acquisitions happen a lot in the startup of space. So that's kind of the concept, again, as donors trying to grow the donor base. So if you have a few donors in the beginning, the idea is to have many, many donors or higher donors at higher rates. Same thing with customers. So but the crowdfunding, so sorry, the mass kind of low value, not low value, low price point angels for angel customers tend to be crowdfunding platforms. So if you think of Kickstarter, you think of Indiegogo.

People coming together and saying, this is a product we want to build in the world and we want to sell. Please, will you buy it early? And so this tends to work quite well, I think, for the customer market. So sometimes, yes, these things can happen within organizations, and that's a conversation for another day. But this external kind of creation is that...

On some of these crowdfunding platforms, it allows there to be many angels at a much lower rate.

I remember there was a watch called Pebble that launched, I think, Kickstarter. It was one of the biggest things that actually made Kickstarter grow, ironically.

I don't know how many customers they initially had through Kickstarter, starter, but that those initial customers help them gain momentum, help them refine the product, help them even build the product and refine the manufacturing process, then sell it to so many more people. In other words, a few customers grew to many customers. Or I'm sure some products have been launched on Kickstarter or Indiegogo, and then those products or companies that made the products or people that made the products got acquired in some way because maybe somebody wanted the IP. Maybe a technology company said, that's a really cool watch. Let us buy the watch. We're going to buy the rights to the watch, to manufacture the watch. So that's another outcome, another possible outcome. So I think when it comes to angel employers, there are different routes to go about it. There could be the, hey, I think this job should exist in the world will you like will one two three people pay for it and support it because they believe that the job should exist so they help create the job in the job creation process or, i think this job should exist and many other people might think that this job should exist. And how do i get those how do we get those people involved in the job creation process again financially but also in terms of refining it in terms of giving feedback in terms of giving perspective and suggestion and and in terms of receiving the job in terms of benefiting from the service so this is something i've been thinking about a lot today and i'm trying to see if oh over 10 minutes so i will end it there but just this idea of what if we started thinking Thinking about the job creation process, creating jobs from thin air, having new jobs in this world, and the importance of what I'm calling angel employers to getting to that state. And how crowd employment is one way of getting all of these micro angels or even macro angels if people want to contribute more to come together to support jobs that we think should exist in the world. All right. Talk to you all soon. Bye.