A survey amongst venture capital investors revealed the top three criteria that are used in assessing the attractiveness of a proposition. Business angel investors are probably no different.
The top three criteria arising from the survey were:
- Management team;
- Exit opportunity;
- Revenue potential.
Tip: make sure that every contact with a potential investor
addresses the top three investment criteria in some form
From the above, it is worth noting that venture capital investors are generally not that interested in what your company does (the product or service is not in the top three criteria). They are interested in how they will make money from their investment.
Whilst business angel investors tend to focus more on what the company does and aim to add their relevant domain experience to the opportunity, the ‘sell’ to investors is not a ‘product sell’ but a ‘commercial opportunity sell’.
This is an extract of the booklet: Rising Business Angel Investment – European Booklet for Entrepreneurs
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