ANGEL INVESTMENT CHECKLIST  

 




Prior to seeking angel investment, it is important that your business is at the right growth threshold and that you are ready for the responsibility of having outside investors. The information below will help you to decide if and when you should seek an angel investment.



Management team
Is your team experienced,
driven, coachable, and willing
to cede some control and decision-making authority
to outside investors?

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Target customer
Do you have an identifiable market segment? Is there a demonstrable and significant demand for your proposed solution?

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Market size
Is the projected spending in your product category large and growing?

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Competition
Have you identified potential
competitors? Do you
understand your company's differentiation points? Will
true barriers to entry help
your company to maintain a competitive advantage?

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Technology
Have you proven the concept behind your product or technology? Can this
be confirmed with data or by objective experts? Have you
built a comprehensive
business plan to
commercialize the technology?

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Protected IP
Have you protected your intellectual property? Have you performed an exhaustive search to be sure that you
are not infringing on patents or trademarks held by others?

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Sales strategy
Do you have a plan to achieve
widespread market
penetration for your products and services? How will
you do this as efficiently as possible? Will you create an internal, direct sales team,
or will you rely on
external channel partners?

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Profit potential
Can you demonstrate how high gross margins and consistent cash flow growth will be achieved?

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Capital needs
Have you identified use of funds raised and how they will incrementally grow your business? Do you know how much capital will be needed to get to breakeven? 

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Financials
Have you developed
reasonable financial
projections - including an
income statement, cash flow
and balance sheet and supporting spreadsheets
- based on logical,
realistic assumptions?

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Exit strategy
Do you have a clear exit
strategy that will enable angel investors to generate
a return of at least ten times their initial investment?

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Business plan
Have you developed a comprehensive business plan that articulates your key assumptions and strategies for how you will grow your venture?

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Board of Directors
Are you ready to work with a Board of Directors?

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