Let’s answer two important questions for any entrepreneur: What is an angel investor and how can you get them to invest in your startup?
3 min read
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Welcome to our first column in the series Angel investors live! It’s a place where every two weeks angel investors directly discuss and share recommendations, best practices, and relevant tools for entrepreneurs looking to invest in early stage companies.
The hosts of this column, Mario García, Santiago Sada and Susana de la Paz, are part of the Angel Hub Ventures team, a club for capitalized entrepreneurs who have an interest in becoming professional angel investors by raising capital early on to high impact startups.
On this occasion they discuss two key issues: What is an angel investor? Y. As an entrepreneur, how can you get them to invest in your startup?
First of all, “An angel investor is an entrepreneur with capital that allocates approximately 10% of that capital to support entrepreneurs. This type of investment has a higher risk than real estate or other types of investment, for example, but they have greater potential. It should be noted that an angel investor supports startups that, unlike small businesses, involve a higher level of innovation and high growth potential. Another difference is that small businesses seek profits and returns, while startups seek to sell the company or go public, ”says Santiago Sada.
If you are an entrepreneur looking for angel investors to invest in your startup, Mario García recommends considering the following characteristics of an entrepreneurial project where an angel investor will mainly want to decide whether to invest or not:
- Co-founder / founding partner team: It is one of the attributes that are primarily analyzed and the one that carries greater weight in the decision.
- Market size: How much market you have to measure growth potential.
- Product: How differentiated is the project and how high is its degree of innovation?
- Commercial traction: If the product / service has already been purchased by a customer or if it is just a prototype and has not yet been approved, if they have orders, etc.
- Potential and openness for output:: How open is the entrepreneur to go public or to sell his company to a large company in the future?
We’ll talk more about this with invited angels in the following columns 5 Investment Properties. See you in 15 days in the next column of Angel investors live from Angel Hub over in Spanish!