How do you explain angel investing to a communist? or to a socialist?
Imagine living in a country with NO private property rights, with limited property rights, or with strong social rights.
In communist countries, the government directs your life. Yes, you might chose to execute small steps and actions, but your actions are constrains: what you can purchase to eat or dress, where can you live, and so forth. Of course you can walk faster, laugh louder, or hug a loved one. Leaders of the communist regime create the big picture, and take care of basic and not so basic necessities.
In socialist countries, the government provides a safety cushion. In some cases, some of your human rights are respected and safeguarded – in a range from healthcare to education to housing – others are infringed – specially with regards to your free speech rights.
In capitalist countries, the government thrives on economic growth. In most cases, humans are assets, and data drives discussions and therefore, decisions.
The main issue with socioeconomic development is that we tend to think that socio is not economic and viceversa. If we had a system that embraced both socio and economic development jointly instead of at the expense of each other, we could have a more attractive system. Where we all win.
Angel investing provides a mechanism to build that bridge, yet I wonder if that could work on a non-capitalist society. The end goal for angel investors is to make money helping others. That concept is completely foreign in a communist government.
The main concept that everyone gets a piece of pie can be replaced to everyone gets the right to create or improve a piece of pie. It is active, not passive.
Talking to my parents, who moved recently from Venezuela, a country mired by corruption and ill-conceived socialism (as opposed of ‘civilized’ socialism in the Nordic countries or Australia), about my activities as angel investing are daunting to them.
They have met some of my investees and can’t related why would I: give them money without controlling some of their assets (no lien on their homes or cars), work with them without charging them for my time, worry about their business, listen to their issues, offer suggestions that could be ignored, join friends or acquaintances that also invest, and don’t get overly upset when things are not going well. It is impossible also for them to understand that: my investees have worked for almost nothing whilst starting their businesses, have no problem asking for funds even when realizing they can’t offer me a house if they default, find people that can help them for no other reason that it feels good, do not seem powerful, and don’t have any powerful connection with any member of the government (yes, that is supposed to be the funny part).
Angels and Founders are in a very weird relationship – I would not know how to explain it.
Whomever said that if you can explain something to a first grader, you can explain it to anybody was wrong. Adults have their own opinions and their own ways to view the world, and those ways evolve continuously, the target is moving. It is not really on trying to explain to opposites but on trying to explain on a whole different level… I wonder then how to explain compassion to a terrorist, or terrorism to a schizophrenic… How to explain loyalty to an illegal immigrant … How to explain …