Entrepreneurs are much curious to know about Angel Investors India and how do they work?
Many are hoping for seed funding from Angel Investors. But before that, you must know who are angel investors and what do they care about; before investing?
So, here I am sharing some facts that all entrepreneurs should be aware of.
Who are Angel Investors?
Angel Investors (best known as angel funder), who provides financial backing for small startups or entrepreneurs, usually in exchange for convertible debt (debit) or ownership equity. In more simplified form, a high net worth individual who invests their own money into startup companies in the hopes of gaining a return on their money.
Many angels are entrepreneurs themselves, or executives and business or community leaders. The capital they provide would be an ongoing support to carry the company through difficult times.
Angel capital fills the gap in seed funding between friends and family.
High-profile success stories like WhatsApp, Facebook and many other have spurred angel investors to make multiple bets with the hopes of getting outsized returns.
Things all entrepreneurs should know about angel investors
Angel investors can invest individually or as part of an angel investor group. Angels come in all shapes and sizes—from newbies to seasoned investors—and they invest anywhere from very small increments of $5000 up to much larger amounts, like $1 to 2 million dollars per deal. The type of deals and industries they invest in, the company stages, and the amount they invest depends on the individual or angel group.
What do angel investors like to initially see from an entrepreneur?
• A clearly articulated elevator pitch for the business.
• An executive summary or pitch deck.
• A prototype or working model of the proposed product or service.
• Early adopters or customers.
Things that Angel Investors care about before investing
Angel investments can be perfect for businesses that are established enough that they are beyond the startup phase, but are still early enough in the game that they need capital to develop a product or fund a marketing strategy.
But before financing, they crisscross your business capabilities.
They inspect for:
• The quality, passion, commitment, and integrity of the founders.
• The market opportunity is addressed and the potential for a company to become very big.
• A clear business plan and any early evidence of obtaining traction toward the plan.
• Interesting technology or intellectual property.
• An appropriate valuation with reasonable terms.
• The viability of raising additional rounds of financing if progress is made.
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