One of the more underrated questions that entrepreneurs need to ask angel investors is “why do you do angel investing?” It seems like such a simple question but you’d be surprised at how rarely it comes up. Many people assume the answer is to make money. Based on my limited angel investing experience (nine companies), there are many better ways to make money if that’s the primary goal. Let’s look at some other angles common with angel investors:
- Desire to help the local community
- Want to “stay in the game” while retired
- Joy of mentoring younger entrepreneurs
- Ability to brag about it with their friends
- Use domain expertise in new ways
My recommendation is to clarify this with angel investors early on so that expectations are properly aligned.
What else? What are some other angles for angel investors?