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Taking Money From Angels (1/2)
Read time 1.4 minutes.

This week, I’m going to have a two-parter (today and Wednesday). Addressing what you should be looking for and avoiding when dealing with Angel investors.

I’ve had dozens of you reach out in the past 2-3 weeks saying that you struggled to raise from VCs in the fall and plan to target angels in the new year. With that in mind, I want to arm you with information you’ll need to make smart decisions when picking which Angels to target and, ultimately, which ones to allow on your cap table.

What should you look for in Angel investors:

1. Value Add - The best angel investor for your company is likely one that can provide unique value. This value can present itself in a few ways:

   1. Industry connections - if they can open doors that nobody else can, this can drastically change the outcome of your business.

   2. Expertise - If you are in a highly regulated industry for example, having a lawyer as an angel investor could help you save money and get to the next round using their expertise.

   3. Past Investing Experience - If they have worked with many startups in the past, they will be able to act as an advisor and help you avoid common pitfalls.

2. Strong Reputation - Always make sure to talk to their portfolio companies, colleagues, partners and more. If a single individual is going to own a significant portion of your company, you want to know their character and past before tying yourself to them.

3. Enthusiasm - Some angel investors are just looking for a place to grow their money. Others love what you do. As someone who has raised from silent angel investors, while it sounds great in theory, it can become an issue as you grow. It’s much better to have an angel investor who loves your company and wants to promote it to their friends, offer advice and contribute to your growth. It might sound annoying, but you’ll appreciate their presence in times of need.

On Wednesday, I’ll write about some of the things you should aim to avoid when working with Angel investors.

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Onwards and Upwards,

Liam Gill

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