World Business Angel Investment Forum chairman and angel investor Baybars Altuntas explains the fundamental principles of angel investing.
Experienced angel investors have a set of principles that they apply to every aspect of their work. If entrepreneurs hope to find an angel who will take their businesses to the next level, it is worth understanding these principles.
More than a simple ‘yes’ or ‘no’
Investors tend to avoid as simple as ‘yes’ or ‘no’ approaches to investment, preferring instead to consider every aspect of the proposal that’s been presented to them. Some elements come into play when concluding, such as an entrepreneur’s personality and background, and how compatible they are with their the investor and their approaches. For this reason, it is important to consider more than just the business itself, and think about how you want to present yourself as a person, a colleague and a business professional. What does your appearance, lifestyle or previous achievements say about you and how you are going to spend the investor’s money?
“While banks and other lenders look solely at the numbers, angel investors invest in passion, strong work ethic and personality.”
Risky business
Securing investment does not necessarily guarantee success in business. In fact, only one in ten scale-up firms that angels invest in go on to be financially successful. Not only should entrepreneurs be realistic about this statistic, but they should also understand how it influences the decisions of a prospective investor. Success is not a given, so you need to ensure your business plans, projections and preparations are thoroughly thought out, realistic and achievable. Investors are always considering their return on investment, so it’s crucial that you demonstrate why your business is worth them taking the risk.
More than just a paycheck
Although there are some angel investors who prefer to remain distanced from any ventures they
