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Things an Angel Investor sees before investing in a Startup

Ideas alone do not build businesses. If you are a startup and looking for an angel investor to come to your rescue, then an exceptional business idea alone will not get you through the storm. There are certain things and aspects which every angel investor looks for in a startup before writing a cheque for you.

Most of the startups fail since they cannot secure funding from an investor. Or even if they do, they fail in executing the proper plan.

We have jolted down a list of most important things which an angel investor looks for before investing in your startup.

1. A Well Laid Down Business Plan: You had an idea but you couldn’t plan what you are going to do with it. Then you are probably destined to go in the list of startups which never acquired any funding from any angel investor. For an investor, a clear and complete business plan is the most important thing. Your startup needs to lay out everything before an investor to make him fund it. Your business model should be complete with your product, the customers you are going to target, what type of problems it is going to solve, who are the competitors and a plan to outrank them and most importantly, how the investor is going to make profits by investing in your company.

2. A Team that Shines: An angel investor invests in people more than their ideas. An investor always takes a look at the team which is going to execute the plan. So make sure that you have a team which not only has skills and a proven track record, it should also click to the investor. Angel investors usually vet the team members to identify whether they are capable of delivering the targets and goals on time or not.

3. Integrity of the Entrepreneur: The determination, resilience and dedication of an entrepreneur matters a lot to an investor. While he should be able to manage teams, budgets, deliver goals and work at his best capacity, he should also have a class and tendency to rise to the occasion when the things start going tough or in the wrong direction. Investor should be able to build trust with the entrepreneur, then only things can start going on the right path.

4. Being Realistic: An entrepreneur should understand the risks involved. Not only for himself, but also for the investor. No matter how great a business plan sounds on paper, its future is always uncertain until it gets into running. It is only the time which tells how the things are going to turn out for the entrepreneur as well as the investor. And no matter what, an investor is always at a bigger risk since it is his money which is involved. Thus, if you own a startup and are looking for an investor to fund, you should be aware of the risks and be realistic about them.

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