Angel
Investment checklist

Angel
Investment checklist

Angel Investors look for early-stage businesses, who have the potential to grow quickly and provide a high return to investors.

This checklist can help you navigate some of the common pitfalls, as well as help you decide whether the process is right for your business – before you start.

<p>Angel Investors look for early-stage businesses, who have the potential to grow quickly and provide a high return to investors.</p> <p>This checklist can help you navigate some of the common pitfalls, as well as help you decide whether the process is right for your business – before you start.</p>

Angel Investors look for early-stage businesses, who have the potential to grow quickly and provide a high return to investors.

This checklist can help you navigate some of the common pitfalls, as well as help you decide whether the process is right for your business – before you start.

Please note

This checklist is not part of an application process for Angel Investment. However, we hope it gives you an idea of what is involved and what you need to do to prepare. Angels may ask for more or less information about your business and the finance you need than what is set out below. This will change depending on individuals involved.

STAGE 1: Preparing your business for Angel Investment

Is that the same amount as you can convince someone to give you?
Can you articulate it clearly and without caveats?
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?
Angels can be demanding. Are you ready to justify your decisions and be challenged by an experienced businessperson?
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

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?
Angels are looking for information on your team, product, technology, market, market opportunity, scale, business model and revenue.
And more importantly, are you being transparent about them? Do you have a clear exit strategy?

STAGE 3: Proving your business

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?
How much do you plan to grow by? How are you going to make it happen?
Do you understand the figures behind your market target?
And can you articulate how you differentiate?
Can you show your patent certificate, customer letters, accounts, and any other documents you referenced in your pitch?

STAGE 4: Evaluating your Angel

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?
Can they offer you mentoring and advice? Do they provide expertise that would otherwise be missing from your business?
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?
Are they as excited about your product or service as you are?
Can you imagine working together for the next eight years?
And will they be comfortable working with other investors further down the line?
Angels are regulated under FSMA (Financial Services and Markets Act) and you can check their credibility online.

What's your next step?

How to find a Business Angel

There are lots of ways to get in touch. Here are the top 3:
  1. Network – attend pitch days and Angel events to meet potential investors
  2. Ask sponsors or contacts to facilitate an introduction
  3. Visit the UKBAA’s database of registered Angels and approach them directly

Take your time

Tracking down the right Angel can take time. It’s worth networking and talking to a lot of people to find the right match. Don’t just grab money from the first person who offers it to you if it doesn't suit your needs - make sure they’re in it for the right reasons.