We look for teams who are passionate and committed to the business idea. As we will be working together as partners, your team’s credibility is essential. In addition, your team must be open to and comfortable with receiving input provided by angel investors and be accessible for contact.
How big is the market that you are going after? Show us the number of people that have the pain that you are curing. There are plenty of great business ideas – but not all businesses will generate returns that justify angel investor and venture capital financing. Therefore, providing a solution to a problem with a large potential market is essential.
We prefer to invest in first-of-a-kind new ideas, rather than incremental enhancements to common products and services. Is this a nice-to-have, or a need-to-have product or service? However, we approach highly complex, esoteric technologies with caution. The concept behind the technology must be proven and verifiable. Further, we avoid science projects that don’t demonstrate a clear path to commercialization. Any breakthrough innovation must be accompanied by a strong business plan.
What sets your team and product / service apart from others? Attributes that convey competitive advantage include intellectual property protection, exclusive licenses, exclusive marketing and distribution relationships, strong brands, scarce human resources (i.e. knowledge and skills), and access to scarce raw materials.
Our members typically seek returns of at least ten times their initial investment, within eight years. This level of return on investment is essential due to the high risk and likelihood of failure among early stage ventures. Thus, a clearly articulated exit strategy – how angel investors will extract such returns – is essential. Angel investors are not just interested in the strategy you select, but more importantly in the how – the operational strategy that shows specific steps you will take to achieve the exit.