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What Angel Investors Look For in a Company
Filed Under (Angel investor) by davidguide on 06-12-2009
Tagged Under : Angel investor, Business, Company, Exit strategy, Financial Services, Growthink, Investment, Venture capital

photo credit: Tambako the Jaguar
In order to consider investing, angel investors must believe that the company has great potential to achieve a liquidity event, and one that enables them to earn a significant return on their investment. The following factors imply that a company has this potential.
The first criterion is scale or the potential for the company to achieve significant annual revenues. If a company expects to raise venture capital after the angel round, it must have the potential to earn annual revenues of $50 million to $100 million within five years.
Conversely, an angel investor, when no follow-on capital is required, might be willing to invest in a restaurant or website that has the potential to generate hundreds of thousands or a few million dollars as long as a clear path has been laid out regarding how they could get a sizable return on their investment.









