Angel Developers – bypassing the Founder’s Dilemma

leap of faith - angel developersNote from Shlomo: I’m very glad to present additional partners of Startup Noodle. I have the privilege to work with Steve on a couple of projects and I highly trust Ikura’s agile process and tech skills to deliver the best prototypes for start ups who begin their journey with a brand new idea coming up.  

Take is away Steve! 

 

Tech-based startups are facing a growing crisis in attracting tech co-founders from a highly sought after talent pool.  It can take many months or more to find the right fit for the startup, yet the level of demand means that even when you do find the right fit – attracting them away from competing offers can be costly and difficult.

 

Meanwhile, the primary goals during the formative stages of a Startup – namely getting an MVP to market, developing your customer base and identifying investors – are slipping by and the market is moving on.

However, if you had a viable product and real customers, you would be much more able to attract the best from the talent pool, secure funding, and get past the numerous barriers that see ideas languishing as unexplored opportunities.  Many a startup idea gets caught in this catch-22 situation and never escapes – it’s time to fix this.

 

One emerging solution to this problem, is to ‘parallelise’ these two critical activities – get your MVP out the door, while seeking Tech-cofounders and investors.

“Angel Developers” are the enablers of this solution.  Taking their model from Angel Investors, they invest their time and coding skills into attractive startups in return for a small equity position and perhaps a low-cost development fee.

The startup is thus enabled to get started quickly and create and evolve their MVP while still searching for the tech co-founder.  Angel Developers should also assist in the recruiting process – ensuring you get exactly what you need from your future CTO.

This acceleration gives the startup a head start against competing ideas and combined with real analytics and customer feedback, a real opportunity to drive the product towards success.  Additionally by having a tangible product to show, investors will have an easier (& faster) decision to make, and potential tech co-founders will be able to more easily assess the opportunity.  Getting to “Yes” from investors and tech co-founders faster is seriously valuable for an early stage startup.

 

How, then, should an entrepreneur select an ‘Angel Developer’ – what should they look out for?  To fulfil the needs of the role an Angel Developer should be able to provide:

- Rapid prototyping with a well defined agile process, with quick sprints and a good track record of delivery

- Expertise in product development process

- Deep understanding of analytics and how to use them to drive Customer Discovery and Customer Validation

- Advice and support in selecting and recruiting your technology team

-  Documentation, tests and architectural advice for your technology team to build on once they’re up and running

 

Angel Developers should also be prepared to become long term advisors to the company.  While your CTO is focused on delivering and growing the product and it’s technology, the Angel Developer can help them to stay ahead with industry trends and exploit new technology opportunities.  Fostering a long-term relationship with your Angel Developer avoids their equity stake becoming a dead equity problem for the startup.

 

Angel Developers are starting to exist in a few different forms – from lone developers who have chosen this model as their primary business to established companies who have set out to service this market.  All forms, however, to be successful will need to have a wide portfolio of ‘code-investments’ – so beware developers who are offering this as a one-off.  Furthermore, for the ‘lone developer’ category it should also be noted that it’s generally not a good idea to try and recruit your Angel Developer as your Co-founder.

This ‘try-before-you-buy’ route may seem attractive, however the pitfalls are tremendous.  For the same reason I’d think twice about an investor who wanted to pour all of his time into a single company, adverse selection implies an Angel Developer who would agree to a full-time long-term commitment to a single company is also not ideal as either an Angel or a Co-founder!

 

Full disclosure – the company I founded, Ikura Group, is specializing in concept-to-creation services for small-medium enterprises and app-for-equity Angel Development.  We’d love to hear from startups seeking tech co-founders to see how we can help them get started sooner – and please share your thoughts and comments in the comments section below.

 

Image credit by kodomut

3 Responses to “Angel Developers – bypassing the Founder’s Dilemma”

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  1. Lee says:

    I have an idea for something tech that would save lives. There are companies that would get behind it I believe in if nothing else, some type of support whether it be capital, advertising or both. My problem is I, know nothing about how to develop anything tech. I am also gun shy about sharing my idea because then anyone can take it and run with it. So where are the layers of protection? How am I protected not only in this manner but when it is developed and brought to market, what guarantees I share in the revenue? Help.

    • Shlomo says:

      Lee,
      I’ve learned (the hard way I must say) that asking people about your ideas and thinking about it with them will gain you so much than protecting it and keep it to yourself.

      developing an idea is a slow process. Building it without having any feedback from potential clients (most important) or other experts in that industry in much much riskier, you might be building something nobody really needs/wants/willing to pay for. Most of the software project out there are hard to protect anyway, and therefore your protection is building a lean company that learns fast and build fast, so you will always be ahead of your competitors. There are probably already several people working on your idea already, so time and making progress is more important then protecting it by not sharing it.

      All this, is not to say you don’t need legal protection and it is something to consider, but not giving it the main emphasis.
      You are welcome to set time on my office hours and we can discuss this.

      goodluck!

  2. MyIndianStay says:

    Very interesting post. We are running an online travel business in India and are one of the biggest vacation rental platforms. Its revenue generating and self funded so far and we do not seek any funding in near future. We would definetly be interested in Angel developers for some develop together some great solutions to problems people face that we have come across while working in this space.

    check it out please: http://www.MyIndianStay.com

    P.S: Open to share more details in private.

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