- Posted April 29, 2014 by
Understanding What Angel Investors Like Sultan Alhokair Look For in Any Venture
How prepared is the company right now? That's one of the first, and most important questions that are asked. More often than not, angel investors will provide assistance to start-ups in their corporate portfolio. However, they want to see that a company is prepared for success beforehand. Guiding is one thing, but most angel investors are not in the business to hold a new company's hand. They don't do your job for you.
How well defined is the business plan? Making the argument that a business strategy is viable, means having a well drawn out plan that outlines the predicted path a company will take. This is vital, to prove that an idea is worth investment. Meaning start-up costs, predicted operation costs, and the length of time the product will take to start turning a profit.
Which also relates to how expensive the company will be in the long term. Start-ups can be pretty expensive, but cutting the waste, and stretching a smaller amount of money further is important to investors. They want to see a return on that initial capital, which means spending as little as possible to see a return on that investment faster.
Painting a more compelling picture is vital. When investors go in for a meeting, they want to be well informed about the investment. That means utilizing tools at your disposal to make the pitch more interesting. Ensuring you utilize programs like Power Point for example, is essential. This provides a much more concise, and visually impressive method for exemplifying the research and planning a company has done, to ensure the success of the start-up.
But sometimes, an investor wants to know that they are covered if nothing works out. Investments aren't always guaranteed to be successful. Sometimes a new start-up flops, even if they had a really solid business plan to begin with. In that case, there needs to be an exit strategy for the initial providers of funding.
That's vital, to ensure that angel investors get back as much of their investment as possible. Whether that means liquidating assets, or something comparable. How an investor can get as much of their investment back, should things fail to succeed, is just as important as having a viable long term plan for business success.