n WORTH NOTING
buzzwords
READERS SOUND OFF
IN THE COMMENTS
angel investor
\ ˈān-jəl-in-ˈve-stər \
An affluent individual who invests their
own money, independently of a firm, in an
entrepreneurial company.
BY Vanessa Labi
ILLUSTRATION: Marissa Lewis
Biba Was a Star in Sacramento’s
Restaurant Scene
I
f you’ve seen the TV series “Silicon Valley,” you know that investors — aside from having
a propensity for ostentatious cars — can play a key role in a startup’s success. Beyond
a financial contribution, they can have an affect on other facets of the business too. For
better or for worse.
The term “angel investor,” or the “angel” part anyway, harks back to Broadway shows
in New York in the 1970s when monied folk would swoop in to fund productions that
would’ve otherwise shut down. Nowadays, it refers to an affluent person who invests in
a startup.
THE BUZZ
Will Assembly Bill 5 Destroy the
Gig Economy?
(Submitted anonymously): I fail to understand
why calling something a part of the gig economy
makes it okay to use independent people to do
jobs that other employers have to call employees
and pay appropriately. In your article you say
janitors are clearly employees, yet you say just as
easily that a doctor or an attorney is not. What is
the difference between an attorney who provides
his or her services to a law firm for their profit
and a janitor who provides his or her services to
a cleaning company for its profit? Both work for a
living and should be treated equally under the law
and receive the same protections. It is obvious that
California is pandering to those with lots of dollars
while, it appears, Massachusetts acted fairly across
the board.
Have something to say? Email us.
[email protected].
20
comstocksmag.com | October 201 9
Nate Fry is familiar with these business-savvy saints. Fry, founder of Sacramento-based
Kalos — an app that connects travelers with like-minded locals — is courting angel inves-
tors to fund his startup and has come across some misinterpretation of the term. “Since
‘Shark Tank’ is so popular, the term gets thrown around quite a bit,” he laughs. “The idea
that anybody with money is an angel investor is a loose interpretation ... that would frus-
trate a lot of people who take it really seriously.” He says an angel investor isn’t simply a
wealthy person who gifts you with money. “Your rich uncle is not an angel,” Fry says.
To the contrary, they’re likely to be discriminating with their investments. After all, it is
their own money vs. funds from institutional venture capitalists, who invest other people’s
money.
THE WORD
Because angel investors are putting up their own capital, they may get quite involved
with the budding enterprise. “You work with them for 90 days, six months, maybe
even a year before they cut you a check,” Fry says. “A lot of that is so they can see your
growth, see what you’re doing, and how you’re utilizing your time and creating success
out of thin air.”
Although embarking on an investment relationship may rely partly on a belief in the
cause or a gut feeling, mostly it’s rooted in numbers and process. “Angel investors go to
classes and learn the process of due diligence and business modeling in order to make a
good investment decision,” Fry says.
The investor, often with a cohort of fellow investors, runs “a fresh model of the in-
dustry.” Fry explains that they’ll run data that looks at “the expectations for sales and
seasonality and seeing if you come up with the same numbers that your founders did.”
Sometimes, this leads the angel investor to become an adviser. That could be a
tricky predicament. “It depends on what you’re looking for from your investors,” Fry
says. Some founders crave autonomy. But, Fry explains, “If you’re a startup founder
who’s looking for a partner who has industry expertise and can (make recommenda-
tions) themselves, it’s super valuable.”
Dennis Dong: As a young architect, I got to meet
Biba through a recommendation to submit a pro-
posal for design services for her new restaurant.
Rather than meet in some office, she invited me
to meet her in her kitchen at her home. I did
not get the job, but I will always remember the
warm hospitality I received from her that day.