Angel Investor tips

I attended the MIT Enterprise Forum last week on tips for securing Angel Investing – I attended the one in Ann Arbor, MI  but there are several around the state held simultaneously and connected virtually.

Some tips that I gleaned are:

  • Dilution may seem painful, but a small percentage of something is better than 100% of nothing
  • You need a team to grow a company successfully and Angels don’t want to see a one-man show
  • Don’t let your valuation get too high before seeking funding.  High valuations can keep Angel Investors away
  • Convertible debt in the early rounds can be preferred because it defers the pricing question
  • Especially if you are planning a VC round of funding later on, the Angel Investor will prefer preferred debt
  • Make sure that your Angels are with you for the long run, that you can approach them for future rounds and they have the staying power for the long haul – you won’t have to woo new investors and it also is not a good sign if your original investors are not still in the game
  • Ask for enough money to last for a while – you don’t want to go back to the well too soon
  • Your investor is not interested in providing funds to pay you the salary you made before you quit your corporate job – they want to invest in product or service and they also want to see that you have some skin in the game

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