1. Getting Angel investors on-board is relational, not-transactional, they want to get to know you to ensure you’re a good bet, so expect to spend time bonding, and demonstrating you’re execution-proof in your habits. Funding is an on-going relationship. You say you can do 1,2,3, and you did 4–proves you’re a good bet.
2. Boot-strapping. They want to see what you’re going to do to control start-up costs, get people working for you at attractive pay, and steady operations.
3. Commitment. They want to know you’re not leaving, you’re committed. They look for you committing your own funds to the business. You have a family, responsibility, you have people counting on you, that makes you reliable and attractive.
4. Nuclear Winter Point. Every start-up is like aging wine until it tastes good. You need to turn positive cash flow in 6-12 mos.
5. Financial Buffers. You have cushion capital for up to one year should the business not make any money for some reason. They like cushion capital to ensure continuity to make a payroll here and there if sales drop or pay a large growth expense if it’s warranted.
6. Corporate house is in order, documented, and clean.
7. Competition. You know what they’re doing
8. Council. You have advisory council to assist and review key decisions (coach).
9. Exec Summary is strong. We need to put this together and make it honest, and spicy.
10. Market Growth. The outlook is for a growing market demand; get in on the ground floor
11. Revenue. You’ve shown revenue growth year after year, setting goals and meeting them in comparison businesses.
12. Strategic partnerships who support the biz model.
13. Intellectual capital is strong.
14. Exit plan is clear. MNA, IPO, Franchising, licensing, repeatability is huge to them.
15. Covenants are strong: cash flow thresholds are strong able to be met. Investors may want more warrant coverage (stock option) if cash dips below minimum cash requirements you must have.
16. The endgame is a sustainable business, not speed and size.
17. Too much money lended can be unattractive because it may not force the discipline needed to create a sustainable business and proven model. Just the right amount is needed, not too little to undermine the project, and not too much that it makes you feel immune to risk and over-estimating how smart you are. Determine how much you’re asking for and be able to explain exactly why.
18. Thinking big. Yes yes yes, this is huge, investors love this.
19. Capacity to lead–how well you can get a group of people to follow you, take things off your plate that you’re not good at doing! This is huge.
20. Passion. Investors love evangelism. It’s infectious, this ties into #19. They want to know if you’re asking people for info and getting their thoughts, you’re very coachable, this makes you a great asset to invest in. People who follow you don’t want to miss out on your adventure you take them on. They look at how much voluntary energy you can generate in others to carry out work for you. They want to know(AI’s) you have big fans who follow you to the end, no matter what. Zealots and disciples.
21. Domain of expertise. The business is adjacent to what you’ve been doing and encompasses your experience, not a 180 from what you did before.
22. Health. Investors want you to go the distance, stay healthy and balance your life. Free days are a key piece to lowering stress, they look for entrepreneurs who have a healthy happy personal life–health, family, and spiritual well-being. Those who don’t won’t last, have higher risk.