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Angel Investing: What You Should Know?

Angel investing is a popular trend these days. This involves one or more investors to negotiate certain terms and conditions before investing in a business, the valuation of which is done beforehand.

Your agreement might help you invest multiple times, commonly known as investing in “rounds”, while maintaining a share in the startup. If the company does well, you might earn thousands and thousands of dollars with every investment that you make.

Who is an Angel Investor?

Angel investors are people who want to invest in startups or small companies with viable future prospects, in return for some agreed amount of interest over specific time period.

Examples of companies who have succeeded in gaining angel investing include Facebook and WhatsApp.

This article comprises all that you need to know about angel investing.

How much do angel investors actually invest?

The amounts may vary from as low as a $5000 to $100,000 or more.

What matters the most to an angel investor?

Here is what angels particularly care about:

  • The viability of your company, its integrity and the extent, to which the founders are willing to grow it to.
  • What opportunity are you maximizing and, the chances of the company to do good business in the future.
  • A carefully crafted business plan, with strategies that have done well in the past, and might as well prove fruitful in the future.
  • Nowadays, angel investors prefer investing in something tech-savvy, because such businesses are doing pretty well in the era of today.
  • Statistics of what has been achieved so far and what more is expected out of such a business.

What should you have before reaching to an Angel Investors?

Be well aware of the requirements before going for platforms that might connect you to an angel investor.  Here is a list of the homework that you should do.

  • An elevator pitch;
  • Executive summary of your business;
  • A working prototype (if what you have developed is a product);
  • An idea of the customers you have achieved so far.

         How long is this process going to take?

As Mark Twain said, “Good things come to those who wait and don’t die in the mean time”. Angel investing is a lengthy process. You might have to try several times before gaining any kind of success in this area. It might take a lot more time than what you had expected. There are going to be times when you would feel like the effort that you put in this, is going in vain. Keep in mind that this would take a lot more time than you think. If you’re lucky enough, you might just come across someone who finds your business as the most fascinating thing on Earth. So, without losing any hope, keep working for your aims and just leave the rest.

Your focus at this stage should be the experience that you are going to gain from this process.

Good Luck!

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─ April 15, 2016