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how to Become a Successful Angel Investor

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We have talked about the various ways in which an angel investor might present themselves in one of our previous posts, to better educate aspiring angel investors in the fundamentals of what they want to get into and also inform business owners so that they don’t get confused when they see some certain clauses in their contract with the investors and today, we would be talking about how to really become an angel investor. 

If you want to pursues a career in this field of investment, be our guest and read on.
You should by now know that the first and the most basic requirement of being an angel investor is having a huge chunk of money to invest knowledge of reading business pans and proposals and identifying the best ones and also, a licence that certifies you as an accredited investor. After all said and done, these are the six basic questions to ask the entrepreneur you want to invest in.
Who are you?
This is not to be asked in an offensive tone but in a true a sincere way that would indicate that your mind is open to knowing the entrepreneurs themselves. Get to know the  they have and the skills that they have acquired to make them equipped for the business. This would give you the first impression and help determine their credibility.

What and who are the major challenges and competitors?
When an entrepreneur knows a lot about the business and can quickly analyse before you the challenges that the business can face, it means that they have done well to prepare themselves against these kinds of occurrences in the future. Also, a good knowledge of their competition and how to tackle them is a good pointer that they tend to be unique and succeed against all odds.

What is your target market?
A business cannot grow if it does not have a target market in mind to cater to.  It could be dependent on sex, status in society or the age of customers, but there has to be a market for a business to cater to. Probe further to determine how they wish to reach their markets too and make a known impact here.

What are your marketing and promotion tactics?
Sales don’t just come by themselves and if there are no sales, best believe that you might have just lost a huge lot of your money in a sorry investment. Ask the entrepreneur what plans they have on ground as regards the marketing and promotion of their goods and services, how they aim to convert customers and break into new markets too, among other things.

How much do you need, and for what?
Here, you already know how much it is you are willing to give out but just pose this question to see if they have actually planned a budget or have a plan of how to spend the money. Someone with a detailed plan of how your money would be spent and utilized is better trusted than one that is just coming to get the money and use it ‘for the business’

What are my return on investment rates?
You don’t want to invest in a business that would take you donkey years before realizing the capital back talk less of getting profits. Ask them what their profit sharing formula is and check how well that agrees with you. 

Some entrepreneurs want funds but get stingy when it comes to money sharing. Make sure you iron this out before putting pen to paper and shaking hands.