"It's another social entrepreneurship deal; I'll never get my money back." That's what I thought 3 years ago when the Tech Coast Angels screened BikeStation. I was impressed nonetheless; the deal had attracted a couple of distinguished members, people I knew well; I thought, there must be more here than meets the eye, but I passed on the deal. Maybe at the time I was thinking I had to get tougher with my investment decisions; I hadn't made any money investing in high-tech startups, how could I invest in a company focused on society's transportation challenges with an emphasis on bicycles, of all things? Maybe if I applied more discretion to my investments I'd see better results; so I thought at the time. Today 3 years later, I have a much greater appreciation of BikeStation and the work they do.
Then I remember another data point, 2 years ago when I sponsored the UC Irvine Entrepreneurship Conference; the keynote was given by a woman who's company delivered school lunches to kids. This was no fly-by-night operation; she had real venture capital, too, but I continued to think that this infusion of cash must've come from the fruits of more technological investments, because what's the big exit here? How could her VCs even make their money back, let alone earn some multiple? But I remember her dedication and something more I could sense: she was enjoying a supreme sense of satisfaction as she fulfilled her ambitious dreams.
Then the next straw, not the final straw, wrong metaphor, but when I interviewed Suzanne Biegel of Investors' Circle just a few months ago, I found it easy to be critical, even snarky. Surely these deals she was packaging and promoting would be unlikely to pay back - this had to be altruism, not a cold-hearted financial focus. The trouble was though; I couldn't get her arguments out of my head. Investing to make the world a better place was the meme that was penetrating my psyche.
We need the best and the brightest working on some of today's challenges; that's not Pollyanna, it's real. I often tell my kids of the screwed up messes in this world they're inheriting. But what's really sinking the hook, turning me into a softie for social causes, is a simple look in the mirror - outside my angel investing life I spend most of my time on matters I can loosely lump into 'trying-to-make-the-world-a-better-place', whether it's scholarships, supporting the arts, or my new found advocacy for cycling. What do they all have in common? It was obvious. As I voted with my time and energy it was crystal clear what mattered most to me. And it's only gotten worse, so to speak; my growing insights into alternatives to automobiles has greatly opened my eyes to the civilized world's challenges in transportation. There has been so many times lately that I've felt, if I were a young man today I'd be a transportation engineer - there's just so many problems to solve, so much work to do. But little of it would yield great personal power or wealth. "But so what," I hear my conscience rebut. The work needs to be done and I could bring a passion and commitment to whatever challenges I'd find... I'm obviously not the same guy who wrote software for Wall Street years ago.
From time to time I meet with entrepreneurs who want feedback on their business plans. There's a lovely courtyard about a mile away, centered on a coffee shop; I recently ran monthly Meetups there to bring these dreamers together. Maybe it's due to the speed-dating style of interrogation that's required as I query these future founders of tomorrow's tech startups; two themes have moved up my list of frequently asked questions: how can you turn this into a lifestyle business, and how this will make the world a better place? The first question often throws them for a loop; astute entrepreneurs know that investors are looking for tell-tales of lifestyle businesses and turning tail, but I feel it's often in the entrepreneur's best interest today. Hey, it's not easy raising money for your startup, and no, you're not the next Facebook, so at least consider a business model that might sustain you, your family and your employees for the long term. Most think I'm crazy, or that this is some kind of a test. And it's not an original idea; listen to Lou Doctor talk of his budding eCommerce empire and his exit strategy, or lack of one.
Then that 2nd question, world-better-place, is it callous of me to even ask? After all, I've made my mark and have the luxury of looking at life from this, new for me, perspective. These entrepreneurs want to buy houses and BMWs, so is it just a waste of breath? Will it resonate with some? I can only hope. If you've read this far may I propose that you may turn out like me -- I see it in many of my angel peers, at 50 or 60 years of age we start to think of what kind of world we're passing on. So my advice to you is consider catching up today with that future self, to that person you may eventually become who, too, will care more about the challenges we face as a society. It may be harder to earn a living; certainly harder to raise venture capital, but you could enjoy the riches of self-satisfaction for your life's work.
Frank Peters is an angel investor, chairman emeritus of the Tech Coast Angels, and host of the Frank Peters Show, a podcast dedicated to angel investing and venture capital.