4 Qualities angel investors want to see in startups

The Startup industry is blooming like never before. This bloom in the industry means both good and bad things for the early starters. While the good thing is, there’s enough acceptance and space in the industry, It also means that these new comers have to face a hard time distinguishing themselves from others and establishing a unique identity of their own.

One of the hiccups that these first time entrepreneurs have to face is getting funding for their young ventures. Angel Investment is one of the most famous form of funding in startups all over the world. So, in order to make the going a little easier for all those entrepreneurs seeking Angel investment, we have a few tips up our sleeve which we would like to share.

Here we go!

1) Angel Investors seek to know the real you –

Having invested in a lot of startups and met a lot of entrepreneurs, they’re well aware of the kind of people and ideas they’re looking to invest into. Hence, the one thing that they’re actually looking forward to when meeting probable entrepreneurs for investment, is to connect with them personally. So, the next time you go to meet a probable investor make sure that they get to know and connect with the real product that you’re selling i.e. ‘you’.

2) They want to see a strong foundation –

While most Angel investors might be perceived as big time risk takers who have landed the role through solid personal net worth and annual income. But most angel investors aren’t the wild risk takers, ready to invest truckloads of money at an out-of-the-box idea kind of people. All they want to see is real money — a legitimate and strong valuation of the startup that isn’t skewed by flimsy funding managed from friends and family.

You’re most likely to land the investment if in some way or the other, your startup has already proved or manages to prove that it is on a path to success in the future.

3) Angel Investors want to taste the action –

While this might not be the case with all of them, but many of the angel investors don’t just want to invest in your startup and then sit back and enjoy. Many of them want to taste the ground excitement and get involved in the day to day working of the startup and use their experience in smoothing the daily working of the startup. They just don’t want to remain an outsider, they aspire to become an integral part of the startup and its working. After-all, they want to see good returns on their investment.

4) Angel Investors want to know about the startup’s exit strategy in place –

While investing, the investors are predominantly looking to see something in the business’s future that makes it a fruitful investment. Most of the times, all they’re looking for is a good carved out solid strategy, that ultimately converts into big money.
However, a solid plan doesn’t always guarantee huge success. Hence, according to the Wall Street Journal, “In general, the only way one can make a profit on an angel investment–or get at least some of your money back–is if the company you’ve funded has an exit event, such as an initial public offering or acquisition. And that can take years to happen, if ever.”

Hence, if you’re an entrepreneur or a startup seeking the attention of an Angel investor, make sure that you have a futuristic exit plan in place so that the investor exactly knows what is he getting into.
With these 4 things in place, you’re surely going to win over your Angel investor. All the very best!

This article was originally published in www.indianweb2.com

Image Credit: Entrepreneur.com

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