What You Should Know About Angel Investors

Angel investing in startup businesses today is on the rise, and mega companies such as Uber and Facebook have contributed to the increasing trend. This means more and more are investing in early stage or startup companies in exchange for an equity ownership interest. But what does angel investing really mean, and what’s in it for these investors?

Image source: Pixabay.com

Typical angel investments range from $25,000 to $100,000 per company, according to a Forbes report. But this can go higher depending on the enterprise and its specific industry. Angel investors typically look for a clearly articulated elevator pitch for the business, an executive summary, a prototype or working model of the product or services, as well as early adopters or customers.

Angel investors would also commonly inquire about the amount of capital an entrepreneur is raising, the monthly burn rate, the detailed financial projections for the next year or two, the unit economics, and the likely gross margins, to name a few. In addition, the investor would want a sense of how the company seeks to market itself, including its PR strategy, customer acquisition costs, and form of advertising to be done.

What does an angel investor really care about then? The answer lies in the founders’ integrity, commitment, and passion; the marketing opportunity being tackled; an appropriate valuation with reasonable terms; and the viability of raising extra rounds of financing once the deal progresses.

Image source: Pixabay.com

It is important to note, though, that this isn’t “remote control” investing, and an angel investor simply shouldn’t go with the flow or accept things as they appear on the surface. A good angel investor does his or her own homework, determining the changes of success for the company and its team as well as committing only to ventures that pass these criteria.

A business graduate from the Iowa State University, Steve Sorensen has always been fascinated by the huge and often meteoric growth in net worth of some of the world’s most successfully companies. Learn more about business and investing on this page.


Author: Steve Sorensen Networth

Hello there. I'm Steve Sorensen, a Des Moines-based investment strategist and business blogger. Welcome to my business blog. I received my degree in business from Iowa State University. I do a lot of research on many of the world's most successful companies, in particular on how they built up their net worth over the years. Not only do the success stories of Fortune 500 companies fascinate me so, they also provide a framework to analyze the potential growth outlook of many companies. This assists me in helping my clients find the right mix of companies to add to their portfolios. I spend my weekend downtime keeping fit by playing tennis doubles with friends. I enjoy country music and like to keep updated on the country music festivals. Check back from time to time to see what I've written about.

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