His company does two things. The first is to shuttle thousands of students and teachers back and forth between the US and China in exchange programs, helping students learn another culture, and helping teachers learn to teach Chinese and English better as foreign languages. The other arm of his business caters to wealthy Chinese individuals, helping them to invest into privately held US companies and also to get green cards and move their families over here.
I remember my first trip overseas, in graduate school. My Pop-Tarts-and-Pepsi breakfast gave way to a croissant, a pain au chocolat, and a juice d'orange, in which the cold oranges were sliced and juiced only after I ordered. How can a chocolate Pop Tart compare to that wonderful strip of nirvana in each pain au chocolat? It can't. My "hotel room" had no bathroom, now shower, only a sink and an interesting piece of plumbing that sat on the floor and had hot and cold running water. After my six week stay, I returned with slightly better French grammar, a real appreciation for wine, and first hand knowledge that a bidet is for washing your hair only in the most desperate of circumstances. The change that small trip to the French Alps had on a young man from the North Carolina Appalachians is difficult to describe, but I never looked at the world in the same way, and always appreciate different perspectives, different backgrounds, different cultures. To this day I love to travel, except the part about leaving loved ones behind.
So Jianli, who had been a brilliant but unhappy chemist, has become a sophisticated international business man who is touching the lives of thousands of students and, through teachers, of thousands and perhaps eventually millions more. This serves as a lead-in to the real reason angel investors invest...
Impact
Most angel investors have tasted the nectar of having a positive impact on other people, and found it so seductive that they weave it into everything they do, from how they tip their waiters to how they invest their money. Once an investor trusts you and your company, once he knows that the financial plan of the company and of the investment are sound and fair, he still will not invest, unless he is certain that by investing in your company, in you, he will also have a positive impact on other people. Without the impact, it is just another investment, just another bet, and there are safer ones around every corner.
I believe the impact comes in three ways:
Personal Impact on You: When an angel investor invests her money in a startup, she also invests her time, and she wants to believe that her presence, her knowledge, her experience can have a positive impact on you and your business, and also on the probability of your company's success, and on your ability to be a positive influence on others.
Personal Impact on Others: The investor must believe in you, and believe that by supporting you, he is enabling you to have a personal impact on your employees, on your customers, your suppliers, and even your other investors.
Global Impact: Beyond the personal influence and impact that they and you can have, they want to know that your product, your company will have an impact on a global scale. People measure this differently, and for some a great computer game is enough impact, but for others they want to save the world by reducing CO2 emissions, or helping to bring world peace, or to stop certain diseases.
It is easy for me to become overwhelmed at this point, that people put such faith in me when they invest, and it is only through the confluence of all three reasons for angel investing that it could possibly make sense. The organization has to be trustworthy to its very core. The transaction and the business have to make financial sense in every measure. And there has to be the real opportunity to have a positive impact on the company, those who do business with the company, and on the world. Only then does angel investing make sense, and, in my experience at least, that is an accurate description of what angel investors will part with their money for. They have to trust you enough to give you their money to solve their problems. For them, who are usually very successful, the biggest problem they have is how they can share that success in a meaningful way.
I hope to do business with Jianli, and don't yet know what form it will take. That he gives me credit as an inspiration for choosing the path that led him where he is can be humbling, but that inspiration was followed by a lot of perspiration, and the perspiration is how he got there. He should be quite proud. And if there is any way that I can help him to increase the impact he is having, I will do it.
