There is still somewhat of a perception in the market by some first time entrepreneurs that angel investors should invest in part for philanthropy. A worthy cause, yes, but philanthropy should never be associated with angel investing.
The perception goes something like this: “Hey, you have enough money. Put some in my company. It’ll be good for me and the community. Besides, you have enough that you won’t miss it.”
Uh-oh. That’s called a misperception, otherwise known as “grandeur de la 1999″.
In a former post, I mentioned that the primary reason that angels invest is to “create wealth for both investors and entrepreneurs”. That remains true.
I attended the Angel Capital Association Board Of Directors quarterly meeting this week with angels from Georgia, California, Wisconsin, Washington State, Connecticut, Massachusetts, Washington, D.C., North Carolina and Ohio. Our number #1 topic of conversation? Return on investment.
2 responses so far ↓
Sean Stannard-Stockton // November 5, 2007 at 7:16 pm |
I agree that angel investors should not feel obligated to invest in a company out of a sense of good will. But it seems to me that angel investors with a social conscious do have an opportunity to fund startups that produce social good (for instance a fair trade coffee company, or clean tech). Investors’ Circle does a good job of showcasing these opportunities.
Knox // November 5, 2007 at 7:27 pm |
Sean–
Sure, “social cause” investing is fine. Investors Circle does a great job at it.
Knox