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Angel investing

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Angel Investing: Frequently Asked Questions What is an Angel Investor? An angel investor is a high net worth individual who invests his or her own money directly into an early stage company, in return for equity (ownership) in the company. In addition to providing financial capital, angel investors mentor and coach their portfolio companies, and help fill in functional or skill gaps in the company. They introduce the companies to other investors, and to colleagues who may be able to increase the company’s value. Most angel investors are entrepreneurs who have exited one or more businesses. They often invest in companies for reasons that go beyond monetary return. This may include staying in touch with new business developments, …show more content…

In the Philadelphia region, angel groups syndicate deals on a regular basis, sharing due diligence as well as terms. What Makes a Company a Good Candidate for Angel Investment? 1. The company has a must-have product or service with a unique competitive advantage. The company’s product must identify a significant need among a large and clearlydefined target market. Investors use the term “pain point” to describe the problem that the product will solve – and the company needs to relieve the customer’s “pain” in a unique and compelling way. It needs to be a “must-have” rather than a “nice-to-have” product for its target market. Robin Hood Ventures Angel Investing FAQs 2 12/3/2010 Angel Investing: Frequently Asked Questions 2. The company has a working prototype of its product or service, and at least one paying client. Essentially, the product needs to be ready to go. If the product is just an idea, it is too soon for angel investors to get involved. Likewise, if the company is already a successful business looking to expand its market, it may be ready for the larger resources that venture capitalists can provide. In the case of life science companies, the product should be either in clinical trials, or ready to begin this process. 3. The company has a detailed and well-thought-out business plan. Entrepreneurs should be prepared for detailed,

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