Angel Investor Advice
English Public
Before I jump in and share the secrets of how to impress angel investors, I should tell you what an angel investor is, and how they differ from venture capitalists.
An angel investor is an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity.
http://www.costamayafest.com/angel-investor-advice/
An angel investor is a high net worth individual who invests their own money into startup companies in the hopes of gaining a return on their money. Many angels are entrepreneurs themselves, or executives and business or community leaders.
Wikipedia defines an angel investor as “an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity.”
How angels invest
Angel investors can invest individually, or as part of an angel investor group. Angels come in all shapes and sizes—from newbies to seasoned investors—and they invest anywhere from very small increments of $5000 (this is more typical of an angel group who pulls their funds to create a larger investment—like $300,000—that goes into one company after the group votes) up to much larger amounts, like $1 to 2 million dollars per deal. The type of deals and industries they invest in, the company stages, and the amount they invest depends on the individual or angel group.
I have pitched to hundreds of angel investors over the years as a result of co-founding two tech companies and raising just shy of $1M in angel capital. I was the CEO of both startups, so it was my job to pitch to the angels. My favorite part of pitching to them was the due diligence process.
If you’re lucky, and an angel’s (investors or groups) interest is piqued by your initial short pitch, they will want to schedule more time with you to get to know you and your team, and to dig deeper into your business plan (i.e. what’s behind your financials, your go-to-market strategy, your current traction in the marketplace, your competition and why you’re better, your intellectual property or “secret sauce,” your exit strategy, and so on).
I also learned quickly that no two angels are alike. What one angel likes another may not care about. For example, one of the angels I pitched to cared deeply about our competitive landscape, whereas another wasn’t too concerned about the competitive landscape, he was more interested in our financial assumptions and my team’s ability to implement in an agile fashion.
Angels versus venture capitalists
Angels differ from venture capitalists in many ways. Venture Capitalists (VCs) typically invest over the $1M range, and more likely over the $3M range, but this has actually started to change over the last several years due to the increase of angel investor groups, and particularly thanks to “super angels” making investments.
VCs are now having to compete with the “super angels,” as discussed in this TechCrunch article. I like how the Angel Capital Association describes the difference between angels and venture capitalists: “Angels generally invest their own money in startups and very early stage companies, while VCs mostly provide capital they have raised from others to later-stage businesses for growth.”
Depending on the venture capitalists, they may want to own the majority of your company (i.e. 51 percent). This will definitely change company dynamics, so it’s important to conduct your due diligence on any investors who are interested in investing capital into your company.
Always look at the portfolio of investments the firm has made, and contact the CEOs and founders of those companies to find out what it’s like having those investors as a part of their company. Ask them, point blank—would they take their money if they could do it all over again? And what have been the pros and cons of taking venture capital?
What impresses angels?
Since no two angels are alike, I thought it would be fun to include tips from a sampling of angel investors from around the United States about what impresses them—and in some cases turns them off—when meeting with entrepreneurs. I have enjoyed working with angel investors over the years because of how eclectic their backgrounds can be.
Below you’ll hear tips from angels who come from all walks of life—from an angel by day, comedian by night, to a sales recruiter and trainer angel. They have all made investments in startups over the last three years, and have some fun and interesting tips to share on how to impress them, and hopefully make it into “startup heaven.”
An angel investor is an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity.
http://www.costamayafest.com/angel-investor-advice/
An angel investor is a high net worth individual who invests their own money into startup companies in the hopes of gaining a return on their money. Many angels are entrepreneurs themselves, or executives and business or community leaders.
Wikipedia defines an angel investor as “an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity.”
How angels invest
Angel investors can invest individually, or as part of an angel investor group. Angels come in all shapes and sizes—from newbies to seasoned investors—and they invest anywhere from very small increments of $5000 (this is more typical of an angel group who pulls their funds to create a larger investment—like $300,000—that goes into one company after the group votes) up to much larger amounts, like $1 to 2 million dollars per deal. The type of deals and industries they invest in, the company stages, and the amount they invest depends on the individual or angel group.
I have pitched to hundreds of angel investors over the years as a result of co-founding two tech companies and raising just shy of $1M in angel capital. I was the CEO of both startups, so it was my job to pitch to the angels. My favorite part of pitching to them was the due diligence process.
If you’re lucky, and an angel’s (investors or groups) interest is piqued by your initial short pitch, they will want to schedule more time with you to get to know you and your team, and to dig deeper into your business plan (i.e. what’s behind your financials, your go-to-market strategy, your current traction in the marketplace, your competition and why you’re better, your intellectual property or “secret sauce,” your exit strategy, and so on).
I also learned quickly that no two angels are alike. What one angel likes another may not care about. For example, one of the angels I pitched to cared deeply about our competitive landscape, whereas another wasn’t too concerned about the competitive landscape, he was more interested in our financial assumptions and my team’s ability to implement in an agile fashion.
Angels versus venture capitalists
Angels differ from venture capitalists in many ways. Venture Capitalists (VCs) typically invest over the $1M range, and more likely over the $3M range, but this has actually started to change over the last several years due to the increase of angel investor groups, and particularly thanks to “super angels” making investments.
VCs are now having to compete with the “super angels,” as discussed in this TechCrunch article. I like how the Angel Capital Association describes the difference between angels and venture capitalists: “Angels generally invest their own money in startups and very early stage companies, while VCs mostly provide capital they have raised from others to later-stage businesses for growth.”
Depending on the venture capitalists, they may want to own the majority of your company (i.e. 51 percent). This will definitely change company dynamics, so it’s important to conduct your due diligence on any investors who are interested in investing capital into your company.
Always look at the portfolio of investments the firm has made, and contact the CEOs and founders of those companies to find out what it’s like having those investors as a part of their company. Ask them, point blank—would they take their money if they could do it all over again? And what have been the pros and cons of taking venture capital?
What impresses angels?
Since no two angels are alike, I thought it would be fun to include tips from a sampling of angel investors from around the United States about what impresses them—and in some cases turns them off—when meeting with entrepreneurs. I have enjoyed working with angel investors over the years because of how eclectic their backgrounds can be.
Below you’ll hear tips from angels who come from all walks of life—from an angel by day, comedian by night, to a sales recruiter and trainer angel. They have all made investments in startups over the last three years, and have some fun and interesting tips to share on how to impress them, and hopefully make it into “startup heaven.”
by honeylee
Vocabulary List
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