What Angel Investors Want

Since my last post I decided to make a change and work backwards! When writing a business plan many entrepreneurs start at the beginning of their plan a work through it piece by piece, but according to the Angel Investor Rob Moss the ability to implement and execute comes from starting at the exit strategy and working backwards. According to an article on business planning structures investors want to see a clear exit strategy and a way to make a profit so they can move on to the next deal.

My Life Lesson!

Incorporating the principal of beginning with the end result in mind allows me to execute my business plan at an accelerated pace. Researching our competition through trade publications and knowing what companies in our industry are doing well and how we are different is key. Trade publications provide important information on industry trends, by utilizing this information it has allowed us to strategically plan beyond the first five-year of business. Taking the advice of the Angel Investor Panel from the previous post, we’ve incorporated a long-term plan with the consideration of how our customer base may change in the next 10 to 15 years. Clearly defining how we are different from our competitors lowers investor’s risks. According to ehow facts Angel Investors look for differentiating factors in a company because it this demonstrates a strong chance of returning five to ten times of their initial investment within three to seven years. 

What’s Important?

When it comes to an investor reading a business plan the most important sections are the financials, management team, and exit strategy! It is important for investors to feel comfortable with your knowledge of the industry, business experience as well as that of your management team. The New York Times has an article that goes into detail on how small businesses fail because of a weak management team. Investors want to see realistic financial projections that show how long it will take for the business to show a profit and for them to recoup their initial investment. 

Angel Investor's Dream Company

The Funding Post asked four Angel Investors to describe what they are looking for in a company prior to investing in them. W. Jay Lovelace wants the company to understand their target market. Rob Moss looks for a company that is executing their business plan. Dwaine Canova is interested in how strong the entrepreneur’s financial pro forma plan is. Canova believes that an entrepreneur cannot properly grow a business unless they understand the financials and the actions of the management team impacts the bottom line.  John Mascarenas looks for companies who understand their industry trends and growth potential. Key points of each investors discussion is listed below:

Key Points

• Company’s growth potential
• 18 month revenue projections plan
• Solid business plan with an exit strategy of 36 to 48 months
• Starting to execute their business plan at an accelerated pace
• Business plan has an exit strategy of 36 to 48 months
• Beginning revenue
• Strong and fun management team with creativity

Angel Investor Bio's

W. Jay LovelacePrincipal, WJL Investments

W. Jay Lovelace is an angel investor as well as the Principal of WJL Investments. Prior to his retirement he was the Vice President and General Manager for Honeywell's Satellite Systems a high tech electronic company that produced $150 million annual in the aerospace industry.  Lovelace holds a bachelor's degree in General Engineering from the University of Illinois and a Masters of Business Administration from the University of South Florida.

Rob MossGeneral Partner, Kingdom Venture Partners

Robert J. "Rob" Moss, CCA (Certified Capital Advisor / Certified Charity Advisor) currently a General Partner of Kingdom Venture Partners, LP and was a founding principal of the Capital Consortium ten company. financings in 2004 totaling $25 million in private funding. Moss is the youngest professional awarded a membership in International Mergers & Acquisitions, Inc., and was inducted into the International Who's Who of Investment Banking, and the Who's Who of Information Technology.  Moss received his Associate degrees in Medical Studies and Business Administration from Iowa State University in 1987, and a Bachelors of Science in Community Health in 1989, certificates in Financial Service Industry, and a Masters degree.

Dwaine CanovaCEO, Veracson

Dwaine Canova works with banks, venture capital funds, angel funds, and other financial institutions to fund service, manufacturing, technology, and industrial products. Canova's book Overcoming the Four Deceptions in Career Relationships provides techniques for entrepreneurs to be  more effective within their industry. Canova holds an MBA from the Wharton School, University of Pennsylvania, and a BS in Agronomy from Fresno State.

John MascarenasDirector of Strategic Investment, Intel Capital

John Mascarenas is a Senior Investment Manager at Intel Capital’s Strategic Investment Group Department where he directs investments in Intel's in Digital Enterprise sector. Mascarenas is directly involved in over 45 private equity transactions that total $1billion! Prior to his reign at Intel Mascarenas was also involved in several new technology startup ventures for Intel and personally started and sold two private companies. Mascarenas holds industrial design patents in digital imaging.