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What do Angel Investors Look for in an Investment Opportunity?

Eytan Elbaz, the former Head of Domain Channel at Google (google.com), reviews what angel investors look for in young companies. Reviewing these considerations will help you prepare for your next angel round.

  1. Founders with a passion to succeed
  2. A strong technical foundation
  3. A demonstration of their investment
  4. An idea weighs less into an investment decision than the team

Transcription

What do Angel Investors look for in an investment opportunity? An Angel investor is a person usually non-institutional who will invests small amounts of capital between $25,000 and $100,000 into your company.

The first thing an Angel Investor will look for, are passionate founders. Are these people who really believe in the idea of starting a company, a culture, believe in a business and want to commit themselves to building an incredible company?

Two; you are going to want to look for some technical foundation. Technical foundation is important because many of the great new ideas do rely on software services or hardware. It’s important that at least one of the founders is well versed in technology elements.

Lastly; an early product demonstration . Angels Investors are going to want to see what they are investing into. Can you show them an early beta launch or some demo of the product that gives them a brief overview or understanding of what it is you’re trying to achieve in the long term.

I’d like to note that the idea is not one of the top three things than an Angel Investor may look for. A great team is going to be able to pivot and find a new idea if their first one fails. An idea is just an idea and it really takes a great team to execute and build upon a business. These are the three things that an Angel Investor will look for as they’re determining whether or not to invest in your business.