When talking about business, it is a common operation to classify people in two main categories: people with a natural talent for entrepreneurship and people born to be venture capitalists. Of course you can stay in both categories, or more probably in none of them. Anyway, until a few years ago this wasn’t a big issue for the most of us, because being the former or the latter was just a matter for the 1% of the population.
Today, in the Internet era, pretty much anyone can be an entrepreneur. It is actually as easy as developing your own iOS app, launch your own internet portal, or maybe code your own indie video game. There is no need of investment in the first phase of development, and once the prototype is almost ready, many possibilities suddenly pop up to fill the cash flow. That is why the role of business angel muted so radically.
One of the biggest gear change has been of course Kickstarter, a simple platform that helps the consumers decide what they want to consume and help founding it. It gets the producer closer to the user, bypassing that byzantine world where a business angel had no time for little ideas.
So did Kickstarter kill the business angels? Not at all! On the contrary, it gave us all the chance of investing in what we love as customers. With of course a big difference: we will never be owners of the project we are investing our money in, even though we will get a different kind of reward in exchange.
An exciting example is Star Citizen. The father of Wing Commander is developing a stunning space video game with an original approach. As the game will be totally funded by the community, for any found milestone it reaches, a set of new improvements will be tailored into the game. So when they passed the 5M$ goal they increased the star ship customization and added a tablet companion application. By now, they have already passed the 18M$ milestone and the funds are still rising.
So the first pledgers that invested in this project when it was just a cocoon of what is now experienced the feeling of being a real business angel. They invested a few bucks in the first stage of development of this video game while they didn’t know if it would have spread its wings or not. But for every milestones that the project reached, their investment raised as the game was offering better mechanics, deeper graphics, and a lot of special contents just for the very first investors.
It is some sort of win-win solution. Possibly the developer would have never reached a 18M$ found (and counting!) from a single investor. And for the pledgers there is a lot of fun during the fundraising process. Instead of boring PowerPoint presentations for the VC, the Roberts Space Industry guys worked hard on community engagement, with a lot of video clips, blog entries and behind the curtains of the game development world. There is even the possibility (for a lot of money) to name a virtual galaxy after you or your furry pet McFloory.