

Are you thinking of approaching an angel investor to put money into your start-up or to help you scale up? Before you start contacting local angels, you should understand what they look for, so you make sure you are approaching the right angel groups and providing them with the information they need to make a “go” investment decision.
Before looking at the specifics of any investment opportunity, angels will determine if there is a fit with their investment approach.
Some angels invest in companies only in their state or region, while others invest only in certain industries: the most popular being health care/life sciences, enterprise software, internet marketing, mobile apps and related technology, and clean tech/renewal/green energy. Some have other criteria like investing only in women-owned businesses or companies founded by military academy grads and veterans. Others are interested only in companies in particular development stages: seed, A round, or B and later rounds.
If the angel group is actively engaged in their investments, they may require a board of director’s position.
About 95 percent of the 565,000 companies started each month will be operated by their founders for many years. Angels are not interested in these companies. They’re interested in the remaining 5 percent that have an exit plan, since this is when they get a return on their investment. All angels will ask you about your exit plans—when you intend to sell your company and cease involvement in your creation.
Once a fit is established, angels will look at the following five factors for each investment opportunity. While the factors are similar across angel groups, each will have its own idea on the importance given to each.
Ready to start your search? Most angel groups have a website listing their investment approach, members and often the names of their portfolio companies. Following are resources to help you narrow your search:
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