Fundraising: how to choose the right business angels?

Published 7 Dec 2021 at 12:01

Up until now we have talked about investors in general or more specifically in venture capital. Today I offer you a Capsule with a focus on business angels (BA).

These are people who invest part of their personal money in start-up companies. They can do it in a very structured, even professional way, or in a more relaxed way.

The good news (or problem) is that there are more and more of these passionate tech investors. 💰 You probably ask yourself the following question: “How do you spot a good business angel? It’s perfect because it’s today’s theme!

Here is a quick summary of the points discussed in the video. This content is not intended to replace the video, but to be complementary.

The investment motivations of a business angel

– Long-term return on investment

– A favorite project – an interest due to his background or personal affiliation

A BA can be an entrepreneur, a former entrepreneur, a start-up employee, an expert…

Just like for an investor in a fund, don’t hesitate to look at their previous investments as well as their professional background to understand if your project meets their motivations.

The four main criteria for choosing your business angel:

1 – Business expertise

– His professional background must be in line with your start-up

– He must be able to correctly understand your company and your vision

– It must provide added value to your company’s strategic decisions or the vision for your product

2 – Its network

The business angel must be able to bring you his network to save you time and help with the development of the business.

This network can consist of:

– Potential clients

– Talent: recruit new assets for your development

– Other investors: now or later!

3 – His reputation

The ecosystem is often an echo of the relationship between investors and entrepreneurs. You can find out from other investors or entrepreneurs he has already funded. If the reputation is:

– Positive, it is reassuring for your relationship afterwards, but also a guarantee of credibility with your key partners (other investors, customers and talents)

– Negative: signs that BA may be too involved in operations and be a source of negative pressure or waste of time for you. It may also deter other key partners.

4 – The Agreement

You need to ensure alignment and good understanding with your investors to build a healthy adventure and work in good conditions.

Some investors have a more professional investment practice than others. Going to experienced investors who have already funded several companies for some time reduces the risk of having a bad experience.

Content curation

Each week I share content with you to go deeper into the topic covered. 🗞

Where do you find business angels? Good news, I have some documents to share with you.

Here are the largest communities of French business angels:

– French founders

– AngelSquare

– WeLikeStartup

– Female business angel

– Super Capital VC

→ Here is a list of some big names in French BA!

Finally, I recommend listening to Marie Outtier’s testimony, co-founder of Aiden.ai and business angel, in the Oui Are New York podcast starting at minute 25.

The last word

A good business angel is a great asset in the development of a start-up company. The latter can be a source of good advice, opportunities or even a guarantee of credibility for your company.

However, beware of all those “wanabee” entrepreneurs who fund companies as a hobby and bring nothing but cash. You are developing the project of your life, so take care to surround yourself with people who are involved, but above all professionals.

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