When finding the right angel to support your business you must first figure out in which category your start up falls under:
- Product Business – making and selling a product
- Service Business – providing a service
- Retail Business – selling someone else’s products to the public
- E-business – using the internet to create a business which can take many forms
Remember you can not lead in everything, so even if your business offers products and services, you must determines which you will lead in. Once you have established what category your business falls under, you can better understand what type of angel you are looking for.
In the book Winning Angels: The 7 Fundamentals of Early Stage Investing, it broke down investor’s roles into five categories:
- Silent Investor – Pure Financial investor, with no active interest in the company, except to sign paper and hope for returns.
- Reserve Force – Ready, willing, and capable to help as requested by the entrepreneur, impact depends on relevant skills and contacts and also on being called at the right time.
- Team Member (Full or Part Time) – Works in the company on particular projects or in a functional area.
- Coach – perhaps the highest impact investor who does not control the company.
- Controlling Investor – An investor who really becomes the entrepreneur by taking control (outright or through conventions) and manages the company.
These are some key points to remember when deciding what role you want your angel investor to play.
Amis, D., & Stevenson, H. (2001). Winning Angels: The 7 Fundamentals of Early Stage Investing. London: FT Press
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