How Business Angels Think
Any investment in early-stage inventions is a risky business and business angels realise that. They therefore try to find ways to minimise their risk. They recognise that the risk is high and that a great innovation might be out there for both themselves and society. Angel investors, particularly angel groups, try to optimise their chance of success in the following ways:
- Ensuring a good mix of expertise in their investment group
- Investing in areas of technology or industry where there is reasonable experience
- Setting clear pitch criteria for inventors
- Undertaking significant due diligence
- Investing in a portfolio to minimise risk
- Joining and contributing to a well-functioning innovation eco-system
Building these optimising techniques around the investments doesn’t assure them of success but it at least increases their chances. You as the inventor, if you are to get capital support from them, need to understand their perspective and be sure you are giving them the confidence and information they require.