Angel investors are not Santa. But this is good news

13.11.2018   |  Startup

If you have reached this blogpost, this means you have done your homework and you know the academic definition of an angel investor: the term originates from the financers of the plays on Broadway and refers to a person who ensures the cash flow of an incipient business usually with their own money.

It sounds romantic, as in a play: a young man with a dream that might change the world is visited one night by a supernatural creature, filthy reach, who helps him make the dream come true and, of course, to change the world. However, you can figure it out that reality is actually different:

  • Angel investors finance startups, therefore need other guarantees than the profit margin. It is very simple: startups do not generate profit in the incipient stages and the contributions in capital of the first investors replace exactly this kind of profitability. That is why the investment they make at time zero will be subsequently converted in shares or in another form of participation to business.
  • Angel investors usually invest their own money, which makes them more involved in the business in which they invest. It is all but natural that they want to keep close to the entrepreneurs they finance, to ask questions and expect information on the evolution of the business. That is why the investments are made on phases: according to the success of the first phases, the subsequent funding is ensured.
  • Angel investors offer more favorable conditions on a short and medium term than the banks or the investment funds. They do not require either interests or dividends, but that is exactly why they expect, on the long run, profitability (Internal Rate of Return) of 20-30%.

However, if you consider these constraints more thoroughly, you realize they are in fact benefits. The questions asked by a competent angel investor are not obstacles, but tools that help you clarify the objectives. The experience brought about by this kind of financers from other businesses means a contribution of financial culture and not only. Also, remember: a person who is not a parent, nor a spouse has been willing to invest their money in you and this obligates you and makes you a better performing entrepreneur.

In a nutshell, a good angel investor is not necessarily measured by the number of zeros of the amount they make available to you. Together with that money, you can win an experienced partner, a sort of brains of your business, which influences you for the better, affecting neither your capacity of entrepreneur nor the reputation that comes with success.

Octavian Pătrașcu  |   13.11.2018   |  Startup

Three things to test and maintain in HR: hard skills, soft skills, and motivation

25.04.2019   |  News  |  Startup
The quality and efficiency of an employee mainly depend on their professional qualifications, but the modern human resources theory refers to this only through a partial term, namely "hard skills". In terms of evaluations and professional management, these “hard skills” are supplemented by a range of different qualities defined as "soft skills", such as the motivation that an individual demonstrates or chooses to develop.

Hard Skills: Easy to identify, necessary, but not enough

The term "hard skills" applies especially to fundamental professional knowledge, skills, and abilities, but not only. For example, if a programmer has to write code in Java, he will obviously have to know the programming language. In the field of hard skills, however, complementary skills such as foreign languages ​​or driving licenses also come into play. If the job description is not IT-related, the computer skills - quasi-generalized today - are also in the same complementary category. Upon hiring, hard skills can be easily tested or proven. Basically, all the skills in this category can be certified through a diploma or a certificate of qualification. These skills are the basis for the future work of the employee, but in the vast majority of cases, they are not enough to ensure good performance at the workplace.

Soft Skills: harder to test, especially required for higher positions

These are somewhat social qualities, relating especially to people-interacting abilities. Soft skills include teamwork skills, communication skills, leadership qualities, and the ability to solve problems as they come. From simple politeness to a nonconflictual attitude, a whole range of attributes can be added here, including good time management or the desire to conform to strict professional ethics. If hard skills are easy to identify, in the case of soft skills, the stereotype enumerations present in CVs are never enough proof of their existence. They can somehow be felt when hiring, during their interview or, possibly, through psychological tests set up by human resources specialists. As they mostly focus on human interaction, soft skills are increasingly needed as the position of the employee in the hierarchy is higher, but the situation differs from one job description to another. If the programmer we had as an example earlier does not necessarily need soft skills when writing code, a sales or marketing specialist will interact with the top management and thus cannot work without them.

Motivation: differs from case to case

Motivation is a problem that concerned psychologists way before Maslow's Human Pyramid of Needs. There are many hypotheses and models that relate to this theory. I will just state that a first classification refers to financial and extra-financial motivations. The former refers to material compensation and are accepted unanimously. However, since the beginning of the 20th century, it has become clear that there is no direct link between payment and the efficiency of a person. 100 years ago, however, besides the famous $5-a-day salary, Henry Ford offered land lots, kindergartens for their children and, in the case of immigrants, English courses to help them integrate into the mass production processes. Today, large companies provide health insurance, relaxation areas, various educational classes, physical activity facilities. All of these include career plans and contract terms that offer job security and much more. Perhaps, the first thing to remember is that motivation differs greatly from one employee to another. Effective management should be as flexible as possible, in accordance with the needs and incentives of employees, beyond the standard packages.

The Employer’s Perspective

From what we described above it seems that that the employer will consider the three components as we’ve structured them. Hard skills are easy to identify and absolutely necessary to ensure performance in a particular position, so these are the first ones that will be tested. Soft skills can be identified to a certain extent in the midst of the employment process, but initial perceptions can be confirmed or denied later on. What’s more important is sustaining them at the workplace, often as a necessity for promotion on a higher hierarchy level. As final words, motivation has qualitative rather than quantitative aspects. Employers should be less concerned about the answer to the question "how motivated is an employee?", but rather show concern towards the type of motivation that employees are most responsive to. Schematically speaking, if hard skills are mainly the employee's concern, soft skills relate to a process that takes place between the employee and the company, and in the case of motivation, it should meet the needs of the employee. Only by paying attention to all the three components, the employer and the employee can have a mutually satisfactory and productive relationship.
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