Angel Investors

How to Find the Right Angel Investor

After deciding to pursue funding from an angel investor, the next step is finding the right angel investor. This requires an extensive amount of research and due diligence. Because angel investors come early in a startup company's journey, it is vital to have investors whose goals are aligned with the company's and who can potentially add value. The various aspects to consider include the investor's personal history, prior investments, current portfolio of companies, interests/expertise, style of mentorship, criteria for investing, and network. Figure 2 contains some questions that may help in finding the angel investor who is the best fit for the startup.

Figure 2: Questions to Ask an Angel Investor at the First Meeting

The first step is to find out more about the history of the angel investor. It is important to understand how the investor's personality will mesh with the company's culture, especially as they often become board members with voting rights. In addition, an investor's background may be an indicator as to the bias or opinions the investor might have on the field or sector that the startup is focusing on. It is crucial to gain insight into whether the investor has experience or expertise in the particular area of the startup and whether they can add more value to the company than another investor. Understanding an angel investor's history will also give an idea of their track record for success. Beyond understanding the investor, it is important to ensure that the goals of the startup company are aligned with the investment criteria of the angel investor. This will help in securing funding and will facilitate a smooth working relationship. Finally, it is important to consider the network that the investor maintains. Leveraging an investor's network may become important for connecting with additional resources, guidance, and mentorship. As we will discuss in the next section, the angel investor's network will become invaluable for securing additional funding with other angel investors or venture capital firms.