“Do I like the product? Do I like the team? Am I comfortable with the market? Do they have meaningful traction compared to the other startups beside them?”
This is what angel investors ask themselves while talking to you. If you want to maximize your chances of finalizing a positive outcome — having them write you a big fat check — you better have a damn good answer to all those questions. Particularly in the current ecosystem, where any investor doing basic homework can reach any company via tools such as AngelList and collect third-party data on you and your competitor via tools such as Mattermark.
Here are three insights into why or why not angel investors may decide to buy a stake of your company.
1. The future isn’t written.
Regardless of what the average investor may tell you, the reality is that no one can predict what company will become successful. Companies pivot, markets shift, founders split up. In short: stuff happens. Look at the three companies everybody knows: Uber, AirBnB, Color. Uber started with an AngelList round at $5 million and now is the hottest company in the planet. Color started hot and vanished regardless of a monster round. AirBnB sold cornflakes and air mattresses before nailing down the model that made it worth more of the Hyatt without owning a single room or hotel. . . (Read More)
Article by: Armando Biondi
Published at: Entrepreneur.com