Partially adapted from "Angel Investing", by Osnabrugge, M.V. and Robinson, R.J.

Search Tips for Business Angels Setting Your Investment Criteria Starting Your Search Screening Investment Opportunities

Venture Financing: Process and Selection Criteria

Setting Your Investment Criteria

(questions to ask yourself before starting the search process):

• Overall, how willing am I to invest in business angel deals?

• How many angel investments do I want to make in total? How much money am I willing to risk per deal?

• In what industry sector(s) am I most experienced and most comfortable investing?

• How far am I willing to travel to help my investment?

• Am I more comfortable investing with others, or by myself?

• Realistically, what potential returns am I looking for in an investment deal?

• What basic characteristics am I looking for in the entrepreneur? the product? the target market? the overall business plan?

• Which issues are most important to me, and which am I willing to compromise on?

Starting Your Search

• Which of my personal friends or business associates might have the network contacts to help me find some potentially attractive angel opportunities?

• Should I try to join an angel syndicate so that I can co-invest with others?

• What do other investors in the area have to say about these services?

• What aspects of the search do I really need help and guidance with?

• Rather than waiting to find a suitable early stage firm, are there any impressive young ventures in the area that I may want to approach with an unsolicited offer for funding?

Screening Investment Opportunities

• Who referred this opportunity to me? Do I fully trust their recommendations?

• Do I understand and have experience in this industry sector?

• What makes this investment opportunity unique among all the others?

• What kind of investment return can I realistically expect to receive?

• How much money are the entrepreneurs looking for? How much equity are they willing to surrender in return?

• What are the most likely exit routes for this investment opportunity?

• Overall, does this investment opportunity fit well with my investment criteria?

Venture Financing: Key Documentation To Be Prepared by the Entrepreneur