Angels are high net-worth individuals that are seeking to make a return on an investment (not donations). But they do usually have additional motivations such as “do a little good, make a little money, and have a little fun.”
To invest in startups they must meet the Accredited Investor requirement set out by the SEC which you can see at this link:
Typically they are not professional investors but have substantial business experience having started and run their own business successfully. Often times they are ex-CEO and VPs of large companies, and there are many different kinds (such as the fund raiser, the networker, the Jack of all Trades, the strategist and the industry specialist).
Each angel has their own criteria for what makes a good investment. Some of the questions they may ask about your start-up include:
1. Does the company have a strong management team?
2. How large is the market? Is it growing fast?
3. Does the company have strong intellectual property protection?
4. Does the company have a platform product that can produce many products?
5. Is there a clear exit path for the company?
Angels bring expertise through industry experience as many have run successful businesses in the past. They potentially bring their network of experienced and successful people, and they often have a standing in the community - so if they lend their support to your start-up, it should help you in raising more funding and attracting support.
Assess the needs of your startup and look for angel investors who can bring more than just funding to your start-up. Even if they don’t invest, you may find some angel investors are good candidates to join your board of advisors. Angel investors typically know other angels that can be referred to your deal.