So what are Angel investors looking for? They are looking to make money. Pure and simple.
They do it by making highly speculative investments and hoping that a small number of them are successful. How successful? Angel investors are typically looking for a 5-10x return on their money in 5 years.
While it varies from investor to investor, angel investors are interested in these characteristics:
- Entrepreneurs and a management team with a history of successful startups
- Product that can create or significantly change an industry
- Compelling evidence that the product will sell, eg actual market sales, pilot tests, etc.
- Intellectual property (eg patents) that can effectively protect the product’s underlying technology
- Financial projections and an exit strategy that show a significant return to the investors