Investment Criteria
What Angels Look For in a Company:

Market Size and Revenue Model


Before discussing market size and revenue model, the angel group has to have a clear idea of what your company does.

Your objective then is to explain the progression and revenue/earnings potential of your company, and the benefit your product or service provides. This can be accomplished by outlining the market size potential and revenue model for your company.

Competitors and Barriers to Entry


This area of your business will be the most dynamic, especially if you have yet to launch your product or service. You will not be able to predict all possible new companies that may enter your space or how existing companies will react. As such, investors are both trying to understand how your company stacks up against competitors as well as gauge your ability to assess and position your company against competitors.

Management


The next, and arguably most important topic, is your company's management. So why is management so important? It's because since early stage companies are risky and have a high chance of failing, investors look to the company's management to ensure they have the experience, skill sets, and connections to give the company the best chance of succeeding.

A strong management team should include some or all of the following attributes:
  1. The CEO has a history of successfully starting and selling companies - i.e. there is a past track record to give confidence that he/she can do it again.
  2. The management team has worked together on past ventures - i.e. there is a past track record that the team works well together and there are no team dynamics issues.
  3. The management team has deep experience in the industry - i.e. they have the credibility and relationships in the target industry to help get traction for the company's product/service.

Financials


In presenting your company's financials, you should give investors an idea of the company's revenue/profit potential. The usual way to do this is to show a summarized income statement. You should show a projection of the company's revenue and income for 3-5 years into the future. If your company has been in operation for prior years, you should also show the actual results for revenue/income for these years.