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Who are Angel Investors Site Overview | Free Stuff | Contact Us | About Us |  |
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How To Attract An Angel Copyright all rights reserved worldwide by Brian Hill and Dee Power
An individual of high net worth, who invests their own money in very early stage companies. No, they aren't listed in the phone book under "rich people."
Angels are responsible for bankrolling technology much more so than venture capitalists. Angels invest in just about every kind of company and in just about every geographic area.
Angels usually take a proactive role in the companies they invest in.
Angels invest because they enjoy building companies not just to make money.
Accredited: meets asset and income requirements No. Entrepreneurs are not entitled to an investor. Lifestyle companies don't interest angel investors.
Most angels want to invest in companies with high growth potential. Surprisingly there are angels who will invest in just about every type of company, not just high tech. They invest in companies close to home.
Open-minded about valuation
Welcomes participation
Knows and can express the unique compelling value of company
Full disclosure
Patient
Can create equity value not just cash flow
Most critical mistakes in a
business plan Mistake Angel Investors Entrepreneurs Venture Capitalists Unrealistic financial
projections 32% 8% 21% Weak analysis of market/competition 32% 16% 18% Unrealistic about challenges 24% 27% Incorrect valuation and exit
strategy 12% 10% Lacking clarity 16% 17% Incomplete 15% 8% Discussion
of mgt is weak 4% 8% Mistakes
and errors 4% 10% Other
18% Entrepreneurs miss the mark, ranking the number one mistake, unrealistic financial projections, as not nearly as important. They
also don't put as much weight on weak analysis of the market/competition as important.
Angels have four major areas of concern while VCs name lots of errors.
Financial projections are a challenge for entrepreneurs. Too high and the projections are seen as unrealistic, too low and those projections
don't entice investors.
Marketing is important, very important. Characteristics of a successful
company Factor Entrepreneurs Angels The great idea 45%
20% Management team 10% 20% Ability to execute 10% 25% Availability of capital 30% 15% External factors
5% 20% Entrepreneurs think the idea and money are overwhelmingly important (75% total) while angel investors believe that a number of factors are equally important. Critical factors when valuing a
company Angel Investors Entrepreneurs Venture Capitalists Factors Points Rank Points Rank Points Rank Quality Management 7.1 1 5.5 1 5.4 1 Growth Potential 4.7 2 5.4 2 4.2 4 Barriers to Entry 4.2 5 5.4 2 4.1 7 Return on Investment 3.9 7 5.3 4 4.2 4 Competition 4.0 6 5.3 4 4.2 4 Proprietary Product 4.4 3 5.1 6 4.4 3 Market Size 4.3 4 5.1 6 4.6 2 Stage of Company 3.7 9 5.1 6 3.8 8 Industry 3.8 8 4.9 9 3.6 9 Entreprenerus aren't sure what'most important, while Quality of Management is ranked first, the point spread between all of the factors is rather narrow.
Angel investors strongly rank Quality of Management first. Often
that's all there is to invest in when the company is so early
stage.
Venture Capitalists agree management is first, but ranks market size second and proprietary product third.
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Copyright 1998-2012, Profit Dynamics, Inc,. Dee Power & Brian E. Hill All Rights Reserved Worldwide |