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Angel Investor Guidelines

Angel  Investor  Guidelines

Some insights for Founders on what Angels look for –

  1. Do Business with someone you like.Life is too short and sooner or later there will be trouble and trouble is no fun with the wrong person.
  2. Always protect the downside.Keep all costs as variable as possible. Never spend one penny on anything that doesn’t contribute immediately to the success of the business.
  3. Go in knowing it will take twice as much money as anticipated and have a good idea where that money is going to come from. Plus, make sure you don’t get hurt or diluted with the first moment of truth.
  4. Take no short cuts around financial management, knowing your costs, cash flows, and monthly variances. Be on top of the operating metrics or the business will run away on you.
  5. Always be generous if things are going well but be ruthless if they are not.It is very important to have a good understanding there are clear expectations of behavior and performance. And if things don’t improve, there will be changes.
  6. Never make a decision based on money already invested – it is gone.  Make all decisions on the plan going forward.
  7. Insist on regular weekly reporting around Key Result Areas of the Business.You can’t measure a week if you don’t know what you wanted to accomplish.  Being busy doesn’t count.
  8. As an Angel or an Angel Group, sell your investment the minute you can’t add value to it.         You can’t demand performance if your only contribution is money.  On the other hand never meddle unnecessarily.
  9. Never stray from what interests you.  There is nothing worse than an essentially bored investing partner.
  10. Give yourself five years to be a market leader. If you ever go more than one year losing market share sell the business since you don’t have what it takes.

Since business is about people, and Angel investing is about helping people realize their dreams, here are additional insights for entrepreneurs with limited business experience –

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