“As a venture capitalist, my job isn’t to be the story. It’s to be behind the story.” – Chris Sacca
Noble words; and they were spoken by one of the undisputed custodians of the information age. Chris Sacca became famous for his work at Google starting when the company was in its infancy and leaving only after it became one of the biggest names in the world. While he accomplished a lot at Google, he is known for pioneering an even more compelling trend—a new type of venture capitalism.
While venture capitalism is hardly a new idea, it has recently undergone serious changes in how it is perceived by investors, and who those investors are. Google is a notable example of a company that has produced many venture capitalists. Some sources have the number of investors as high as 40, and the number of projects and businesses invested in as high as 400.
Ex-Google employees are hardly alone, either. The entire Silicon Valley area has become a hotbed for venture capitalism, and so many of these venture capitalists share the same enthusiasm for new ideas and creative liberty that they have achieved an identity all their own. They are called “Angel Investors”, and the statement Sacca made above illustrates their perspective on investing in new companies.
Compassionate Capital: Staying Behind the Story
Many of the people who are called Angel investors today came from massive companies that started out as small start-ups themselves. Of course, the face of technology has significantly changed in the past 30 years. Once, almost all companies in the field were dealing with new technologies. They were mostly staffed by young and enthusiastic people who had a sincere interest in making their dreams a reality.
Different motivations define the technology field today, however. Intellectual property is something to be collected and hoarded. Many new companies get bought out very early by the giants in the field, and those are the lucky ones that didn’t get sued out of existence for unknowingly use one of the thousands of patents that are held by these giants.
The angel investors decided to take a new approach. They provided early funds to some of the most high-risk projects, and they backed up their investments with the kinds of tools that even established businesses would be envious of. There are several ways that the Angel Investors have made an impact without leaving a mark on the companies that they support.
One of the biggest beliefs of these new venture capitalists is that even the companies that they invest in deserve a level of self-determination. They allow these companies to succeed, and take the credit for the work they did. There are several advantages in particular that make this style of venture capitalism that much more “angelic”
Offering More than Money
The angel investors are famous for offering a lot more than money. They use their many years of experience in the industry to help the companies that they invest in succeed. They often mentor the people running the start-up to help them understand the best way to run the business. They have been known to give advice on purchasing, where to introduce products, and how to build the hype for a first release.
In short, they don’t just invest their money; they also invest their time and their expertise into getting their projects off the ground.
Networking Investors and Projects Together
While the angel investors come from many different companies, many are from closely-related fields. Former Google employees in particular are famous for keeping their networks alive. When angel investors from Google choose a project, they usually tell their friends, who may also invest when they find out the details.
The angel investors are also known for linking their projects together when they find that two different start-ups are working toward the same goal. When these companies come together, either to join up or exchange information, both can become stronger as a result.
Allowing Creative Control
Losing creative control is one of the biggest fears that start-ups have when it comes to accepting investment dollars. However, this is never a problem with the angel investors. Allowing the companies they invest in to have creative control is one of the standard practices of this new generation of venture capitalists.
Another factor that cannot be overlooked is the effect that this brand of investment has had on the future of venture capitalism. Thanks to these pioneers, a revolution started with the determination to give everyone the opportunity to make an investment into the products and services they wanted to see on the marketplace.
Starting a Crowd-Sourced Revolution
Even with a valley full of Angels, it could be hard to attract investors to certain projects. That need has been fulfilled in the very recent past, however. Companies such as Kickstarter, Indiegogo, and many more have made it possible for anyone to be a venture capitalist with initial investments as low as a dollar.
On these websites, everyone has the ability to donate as much as they want to, to whichever project they think has merit, and there are thousands to choose from. Some of them are the work of game designers who want to recreate lost franchises, others are fresh performing groups and still others are looking to get new companies of the ground.
Many of these start-ups offer incentives for investment. Signatures of the creators and limited-production swag are popular options. Oftentimes, the rewards aren’t really commiserated to the amount of money being offered. Yet, that hasn’t made much of a difference is the skyrocketing popularity of these services.
What is most likely the case is that people like the feeling they get when they support other people. They like exerting control over the marketplace by choosing what gets created and like knowing that they made a personal contribution to something that could become a cultural institution.
These feeling must be similar to the ones that were felt by the earliest of the Angel investors, and likely came about because of the stir that their compassionate capital created. Thanks to their work, the world is a more vibrant place, and the ubiquity of the internet is just another engine to bring the idea (and the people who want to make it into reality) together into a community of creators.