What do business angels, or angel investors, want to see in startups? Drive, passion and smarts? Sure! But every startup claims those qualities. So what do investors really look for? While every business angel is different, here are five qualities every entrepreneur should have:
Investing in startups is risky business; one of the best ways to manage the risk is to go with people who already have startup experience. You can study it and read about it, but you have to live it to understand it. What may surprise you is that most investors respect experience with failure as much as with success. Most of them know what failure feels like and respect the entrepreneur who can acknowledge the failure and recognize what went wrong.
Business angels like to share what they know with the companies they invest in. So they like entrepreneurs who listen and learn continuously. Angel investors don’t like entrepreneurs who treat every question like an attack. Entrepreneurs should own their mistake and be open to taking advice from investors.
Business angels or angel investors like startups who build teams. It’s difficult for the founder to do everything on his own. It’s good for the founder to know what they don’t know, so they can build to bolster up the weakness. This is what investors like to see.
Believe that it matters
Startups with a cause do better. When potential investors ask startup founders how they developed the idea, they are often fishing for the authenticity – the light in founders’ eyes- that they hope to see. Startups that care about their customers and the solution they offer. Investors know that makes a difference.
Dig into well-researched statistics on entrepreneurship and you’ll discover that the vast majority of successful startup founders have college degrees and almost half of them have graduate degrees. There are certainly exceptions to this. But having the degree means you were able to stick to a program for a few years and got through difficult challenges, were able to meet deadlines and delivered work. These are important features for Business Angels
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