What is an Angel Investor? Find Your Business Champion!

You've probably heard the term "angel investor" before. But you might not know what it actually means. An angel investor invests their money in startups in exchange for equity.

Angel investors usually have a personal connection to the startup's founder or team. And they're passionate about the company's product or mission. Since many angel investors are also experienced entrepreneurs themselves, they have knowledge that can provide valuable mentorship to the teams they invest in!

How do angel investors differ from VCs?

Venture capitalists represent firms, while angel investors are investing their own personal money. VC firms are usually larger than angel investment firms. They usually invest millions of dollars into a single startup.

Because of this, VCs have more control over a startup's operation than angel investors. But, this doesn't mean that angel investors aren't important for a tech startup to grow. Angels are often critical in helping a new company get off the ground.

How Can A Angel Investor Help Tech Start-ups?

Angel investors provide much-needed capital for startups. Some startups struggle to raise funds from other sources such as banks or venture capitalists.

In addition to financing, angel investors often provide valuable advice and mentorship to young entrepreneurs. And because most angel investors are well-connected individuals, they can also help start-ups by making introductions to potential customers, partners, or employees.

What Do They Look For?

When looking to invest in a tech startup, angel investors will often consider the same factors as any other type of investor.

These factors can include:

• the team behind the project
• the size of the market
• whether or not there’s a competitive edge

However, with tech startups there are often a few additional factors that need to be taken into account. These include things like:

The strength of the patent portfolio

For many tech startups, their intellectual property is their most valuable asset. It's essential to have patents in place to protect their ideas from their competitors. Otherwise, they run the risk of having their ideas copied or reverse-engineered.

The complexity of the technology

The more complex the technology, the harder it will be for competitors to catch up. This gives the company a competitive advantage. With that edge, their product will be more attractive to investors.

The lipstick test

And no, we’re not talking about makeup. Most tech startups are founded by engineers interested in solving problems. With that, comes the issue of them ignoring the value in creating attractive products.

While this might not be a problem when it comes to B2B products, it can be fatal for consumer-facing products. That’s why angel investors often refer to this as the lipstick test”. Would you buy a product even if it wasn’t technically impressive?

What are some famous examples of angel-funded startups?

Some of the most famous tech startups were funded by angel investors, including:

• Google
• Facebook
• Twitter

It's estimated that almost 70% of all tech unicorns received funding from angels during development. So if you're interested in joining the ranks of these billion-dollar companies, you'll need to find an angel investor to get started!

Learn more about the world of tech sales with Uvaro!

If you're thinking of starting a tech company, think about finding an angel investor to get started! So if you're interested in joining the ranks of these billion-dollar startups, take a look at angel investors!

When it comes to tech, angel investors can be the champion you need when starting out. So if you're interested in joining the ranks of these billion-dollar startups, take a look at angel investors!

If you’re curious about tech sales, we’ve got your back. Our Workshops and Courses have been developed to help you find Career Success in the tech industry. Check out our Career Success Catalog to learn more and build a lucrative career in tech with the safety and security of a supportive community by your side!