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.