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How to

Use This Book

To create Finding an Angel Investor In A Day, we gathered the most important and useful information about raising money from private investors from the people with real-life experience—angel investors, entrepreneurs who’ve raised money successfully, members of angel groups, and others who advise entrepreneurs on financing. We focused on what you need to know to locate and attract an angel investor and to understand the key terms you’ll encounter in the process, especially in the early stages.

Finding an Angel Investor In A Day is organized in a step-by-step fashion, outlining the information you need to know during every stage of finding and securing an angel. While it is certainly useful (and recommended) to read this entire book regardless of how far along you are in the fundraising process, you may want to focus on different sections, depending on your particular situation:

 If you’re brand-new to the fundraising process, you’ll definitely want to follow this book from start to finish. Begin with Step 1 to learn what angels are looking for in an investment, whether an angel is right for you—and whether you are right for an angel.

 If you don’t know where to find a potential investor, you’ll be particularly interested in Step 2, which details how to locate an angel—whether an individual or an angel who is part of one of the increasingly popular angel groups.

 If you’ve already identified an angel investor, you may want to go straight to Step 3, which deals with how to prepare your company for the fundraising process, and Step 4, which gives guidance on how to successfully pitch your venture to an investor.

 If you already have an angel who wants to invest in your company, you might turn directly to Steps 5, 6, and 7, which deal with the all-important issues of valuation, negotiation, deal terms (including the term sheet), and the due diligence that angels will conduct on you and your business.

Once you are at the point of negotiating a deal with an angel, it’s absolutely critical that you get a qualified securities attorney to help you with your own deal. While this book enables you to become comfortable with the key terms of investments, such deals are extremely complicated, with major financial and personal implications.

Using This Book

Throughout this book, you’ll see worksheets and checklists you can use to write down the information to guide your own search to find and secure an investor. If there’s not enough space on the worksheets, use a separate piece of paper to record your thoughts and data.

The Market

Use the following worksheet to prepare a market analysis. You’ll use this data when you answer a potential angel’s questions about the size, characteristics, and potential of your market.

Where is your target market located? (City? Country? Region? Urban? Suburban?)

What are the characteristics of your target customer? (Consumer customers: Age? Income range? Gender? Family size? Education? Business customers: Number of years in business? Number of employees? Industry?)

What motivates your customers to make purchases and what are their buying patterns?

What is the size of your market?

What have the growth rates been in your market for the last 5 years?

Evaluate Prospective Angel Groups

Fill out this worksheet to evaluate the groups you are considering or that you’ve approached. Make a copy for each group you evaluate.

Name of prospective angel investor group:

Proximity:

Investment dollar range:

Level of promised assistance:

Industry experience and contacts:

Relationship with lead angel or manager:

Investing history:

VC contacts: