What are we looking for?
I can’t say that every investor is the same; we all have different backgrounds, specialties, and experiences that sway our investing preferences. I would argue that a majority of angel investors look at technology/medical technology based companies that address a real and existing problem. Too often we see ideas that sound great in theory but they currently have no demand. We want to see a company that is solving a real problem, addressing some existing market demand.
Many companies are founded by people who worked in an industry, recognized an unmet demand or high level of inefficiency, and decided to fix those problems. We occasionally see someone who is trying to invent a completely new product or process that may actually “disrupt” the market (Facebook is a great example). Part of what we like to see is a founder who is working in a familiar space doing what they do best.
A friend of mine recently sent me a speech that David S. Rose gave to a bunch of folks on how to a pitch to a VC/investor.
There is a transcript on the side if you’d rather read it. Mr. Rose has some great advice for anyone in business, not just startups.
He discusses the finer points of making a good case for the startup and more importantly the entrepreneur. At the end of the day, the investor is investing in the founder(s) just as much as the idea. The investor needs to believe that the entrepreneur is passionate and committed to this company.