Angel investors now supply the overwhelming majority of high-growth startups with their first money after the founders have tapped family and friends. How can entrepreneurs find and work with angels? Professor Ilya Strebulaev shares seven basic insights: stnfd.biz/rVq42 1. Don’t be fooled by the word angel These investors aren’t donating to charity. Most are disciplined investors; they are often successful entrepreneurs and high-tech professionals in their own right. 2. Understand angel networks Angel investing is a personal business, and angels rely heavily on personal networks of like-minded investors. The most important key to raising money from an angel is often the good word from another angel. 3. Look close to home Most angel investments are within 50 miles of the investor, and angel networks are often in geographic clusters, like Silicon Valley and Boston. 4. Shared roots are important Search for investors who have natural affinities with your team. 5. Angels will hunt for the fatal flaw in your plan Angel investors want “disruptive” ideas that will upend existing business models. If your idea is disruptive, however, can you hold on to it? Can copycats and incumbents jump in as soon as you’ve shown the way? 6. Your team may be more important than your concept — or even you Angel investors will place heavy weight on your management team. They want evidence that the team can work together when the going gets tough. 7. Angels are evolving fast The success of traditional angels has spurred a new breed of “superangels” or “micro VCs.”
Posted on: Thu, 19 Dec 2013 17:43:19 +0000
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