Angel Investment checklist

STAGE 1: Preparing your business for Angel Investment

• Do you know how much money you need?
  Is that the same amount as you can convince someone to give you?

• Are you focused on what you need the money for?
  Can you articulate it clearly and without caveats?

• Do you know whether you’re looking for a one-off investment or ongoing rounds?
  Do you know how you will structure those funding rounds? Do you know where the next set of money is coming from and when you will need it?

• Are you ready to regularly report to an Angel?
  Angels can be demanding. Are you ready to justify your decisions and be challenged by an experienced businessperson?

• Do you know if you will be using the Enterprise Investment Scheme (EIS)?
  Angels can get tax breaks on investments of a certain size. Find out if you and your Angel are eligible up front, as this will save you both time further down the line. To read more about EIS, visit Gov.uk.

STAGE 2: The pitch

• Do you have a clear, concise pitch deck?
  Angels dislike seeing laborious business plans up front. Is the story in your pitch deck compelling? Will people understand what you do and what makes you different?

• Does your pitch deck touch on all the key areas?
  Angels are looking for information on your team, product, technology, market, market opportunity, scale, business model and revenue.

• Are you realistic about your expectations for the business?
  And more importantly, are you being transparent about them? Do you have a clear exit strategy?

STAGE 3: Proving your business

• Do you have a clear set of financial projections?
  Can you show that you know your numbers, like where your money is being spent and where your cash burn is? Do you know your margins? Do you know your customer acquisition cost against life time value?

• Is your growth strategy clear?
  How much do you plan to grow by? How are you going to make it happen?

• Can you talk around your market research?
  Do you understand the figures behind your market target?

• Can you prove that you understand your competitors?
  And can you articulate how you differentiate?

• Do you have your documentation in order?
  Can you show your patent certificate, customer letters, accounts, and any other documents you referenced in your pitch?

STAGE 4: Evaluating your Angel

• Are you comfortable with the amount of money offered and the share your Angel is expecting in return?
  Does it match up with other deals they’ve done before? Does the dilution of your ownership in your business keep you incentivised? Is your Angel taking a board seat or not, and are you comfortable with this?

• Does your Angel offer more than money?
  Can they offer you mentoring and advice? Do they provide expertise that would otherwise be missing from your business?

• Are you aligned on your interests and expectations?
  Do you share the same growth expectations? Do you both have the same idea on how much funding you’ll need? Do you see challenges in the same way?

• Does the Angel have passion for your business?
  Are they as excited about your product or service as you are?

• Do you and your Angel get along?
  Can you imagine working together for the next eight years?

• Do you understand what your Angel wants from an exit and when?
  And will they be comfortable working with other investors further down the line?

• Is your Angel self-certified as High Net Worth or Sophisticated Investor?
  Angels are regulated under FSMA (Financial Services and Markets Act) and you can check their credibility online.

What's your next step?