Thank an Angel

Through the summer and early fall leading up to Election Day, a voice in my head kept saying; make it stop! The constant barrage of inane and downright deceptive ads was an insult to the electoral process and the main reason why our most accomplished citizens want no part of this money fueled circus. For me the hardest thing to listen to was one politician or another claiming to be able to create jobs. Other than government jobs (which are funded with money collected from others) politicians and governments at any level do not create jobs. Obviously private sector businesses producing a good or service create (net economic gain) jobs and to do so one of the main things they need is access to capital.  I was recently able to successfully conclude a relationship with an investor in my company that had been with me for over twenty years. It is safe to say that without this persons support my business and the jobs it created would not exist today.

Capital is the life blood of any enterprise and access to it for startups and fledgling small businesses is always a problem. This is where the Angel Investor becomes an indispensable engine for job growth.  An Angel Investor is unique in that they invest their own money (unlike institutional and venture capitalists who invest other people’s money) in entrepreneurial concepts. Many of these investments are made to individuals pitching what can charitably be called; shaky business plans. Even though Angel Investors are primarily hoping to turn a profit on their investments, many have other motives for backing high risk ventures.  Most lend money to relatives, friends and acquaintances who come calling with a good story and no collateral. The vast majority of these projects go down in flames taking the investors cash with them and causing financial pros to categorize the Angel as naïve or just plain soft hearted. That could well be true but for many it is often their way of giving back to an informal system that may have helped launch their own career. Despite that, Angel Investors are not just the most common funding source for budding entrepreneurs they are often the only source available. The small percentage of ventures that do succeed produce desperately needed jobs and leave behind companies that often had no other real chance of getting off the ground.

If you dig into the history of many major companies you will invariably find humble beginnings and an Angel Investor. In fact most of the companies that are eventually backed by institutional and venture capital sources have used Angel Investor money to get their product, service or idea to a point where they can even make a pitch for next level funding. The point is; politicians don’t create jobs! More often than not it is a risk taker with a huge appetite for hard work and a financial stake from an Angel Investor that grows our economy. People who risk their own hard earned money, their retirement savings, their home equity and a chunk of their personal financial security should be the ones saying; “I create jobs”. These are the true unsung heroes of our economy and the reason why many of us who have a job should thank an Angel.