Not All Angel Investors are Created Equal

Recently I was talking with an entrepreneur that was looking to put together a seed round of angel investors. We talked about the normal strategies and halfway through the conversation I asked “What type of angel investor would be ideal?” Without missing a beat he said that he’d like a couple angel investors that have been CEOs of fast-growing companies. I probed deeper and he offered that he was confident he could raise the modest amount of money based on his network, but that he preferred to hold out for angel investors that had experience running companies and wanted to help mentor him.

Here are a few things to consider when it comes to angel investors:

  • Do you just want money or do you want something more like a mentor relationship?
  • What areas of expertise do you need the most help with (e.g. sales, marketing, product management, finance, etc.)?
  • Do you have any geographic preference for where the money comes from?
  • Do you want to plug into a certain circle or group (e.g. alumni from a company or industry)?

Not all angel investors are created equal. Some want to simply write a check and others want to write a check and roll their sleeves up and help out in a serious way. The world needs all kinds to operate but entrepreneurs would do well to think through what they want, and don’t want, in their angel investors.

What else? What are some other thoughts on angel investors and the idea that they aren’t all created equal?

2 thoughts on “Not All Angel Investors are Created Equal

  1. Valuable advice.

    I would imagine in some cases, a founder will want both types of angel, to receive mentoring without experiencing too many cooks in the kitchen.

  2. Thanks for explaining a bit more about what some types of Angel Investors do. It seems to me that a true angel investor would really want to roll up their sleeves and be an active board member and help with designating (recommending) members of the management. What do you think? Is that common or is it overstepping a boundary?

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