One of the common questions I get from other angel investors and VCs is regarding my personal angel investing strategy. Most investors have a strategy about the types of deals they like to do, and then when a deal fits the strategy, they go through their investment criteria (see Ask Investors About Their Investment Criteria).
Here’s my angel investing strategy:
- Look for entrepreneurs that have failed at a previous venture and started again (shows they’re serious about being an entrepreneur and aren’t a hobbyist)
- Find small, fast growing markets that have the opportunity to be much larger
- Demonstrate modest traction with at least 10 arms-length customers (once an entrepreneur has 10 customers, I can help on the journey to 100 customers)
- Prove basic unit economics (strong gross margin potential) and primarily recurring revenue
My angel investing strategy has evolved over the past few years and continues to do so. This strategy focuses on serious seed stage entrepreneurs with early, modest results and a recurring revenue business model.
What else? What are some more personal angel investing strategies?