5 essential factors for attracting angel investment
Marjorie Radlo-Zandi Contributor Share on Twitter Marjorie Radlo-Zandi is an entrepreneur, board member, mentor to startups and angel investor who shows early-stage businesses how to build and successfully scale their businesses. More posts by this contributor 4 key strategies for succeeding at international expansion

In more than two decades as an angel investor and early-stage company scout, I’ve met with hundreds of entrepreneurs seeking funds and sat through an equal number of slide deck pitches.

You could say I’ve seen it all. From my point of view as an angel investor and former entrepreneur, here are five essential factors I look for when considering my next investment.

Offer a game-changer that stands out

To attract the right angel investor, make sure to present a compelling technology or product offering that solves a critical customer problem. Be sure to showcase your unique competitive advantage — an incremental improvement over the competition is not a winning formula for attracting investment.

Include key market metrics such as TAM, SAM and SOM. TAM (total addressable market) is the total revenue possible if a product or service were to achieve 100% market share. TAM answers the question of who would theoretically buy your product or service. It describes the total revenues a company could make if it had an all-encompassing monopoly with total market share for its product or service.

The TAM for the non-alcoholic beverage category, among the many categories where I invest, takes in the total worldwide non-alcoholic beverage market, looks at all revenues from beverage purchases, imagines sales in all countries in the world, and assumes no competition except tap water. SAM (service addressable market) is the TAM segment within geographical reach that you can target with your products or services. Lastly, SOM would be the share of the market that a company could capture over time.

Present solid financials

When presenting to angels, it’s critical to show proof of concept, traction with regards product/service development, and revenues. Knowing your company’s financial condition and presenting your numbers to investors is paramount, as is making sure the past and current numbers you present are accurate.

Investors want to see top line, gross margin and net profit margin. Don’t be tempted to overstate or hide trouble spots; it’s a huge red flag that investors will see through, sinking your prospects of attaining investment.

Founders have a tendency to peg a much higher valuation to their company in a good economy. Resist the temptation! Marjorie Radlo-Zandi

Case in point: Two venture capital groups recently pulled out of a game-changing SaaS company investment because the founder radically inflated financials and misrepresented the product development stage.

Have a realistic five-year projection that includes profit and loss – a mid-level projection that isn’t too optimistic or too conservative is best. These financial projections give investors a look into the future of your business sales, cost of goods, operating expenses and bottom line income. They become a collection of estimations and forecasts that give a data-backed view of your company’s financial future.

TECH NEWS RELATED

Disney’s streaming biz reorg includes an international content hub, plans to double Disney+ footprint

Disney announced today it plans on expanding its direct-to-consumer streaming business to more global markets and is creating a new International Content and Operations group to aid in this push. The group will be headed by nearly 25-year Disney veteran Rebecca Campbell, who will focus on local and regional ...

View more: Disney’s streaming biz reorg includes an international content hub, plans to double Disney+ footprint

As its data flows woes grow, Google lobbies for quickie fix to EU-US transfers

As the legal uncertainty in Europe clouding use of US cloud services cranks up, Google has responded by firing up its lobbying engines to call for US and European lawmakers to get a move on and come up a new rubberstamp to grease transatlantic data flows as usual as ...

View more: As its data flows woes grow, Google lobbies for quickie fix to EU-US transfers

Tom Brady’s buzzy celebrity NFT startup Autograph banks $170M from Silicon Valley’s top crypto investors

Autograph, an NFT agency co-founded by athlete Tom Brady with a particularly deep bench of star power, has banked new funding from crypto investors who hope the platform can bring a new generation of celebrities and their fans into the fold of crypto collectibles. The startup tells TechCrunch it ...

View more: Tom Brady’s buzzy celebrity NFT startup Autograph banks $170M from Silicon Valley’s top crypto investors

Instagram launches early test of creator subscriptions in the U.S.

Instagram is giving creators more ways to make money with today’s launch of Instagram Subscriptions. The feature, which was spotted hitting the App Store back in November, is now officially in early testing with a small group of U.S. creators who will be able to offer their followers paid access ...

View more: Instagram launches early test of creator subscriptions in the U.S.

Israel’s Viola Ventures hits $250M for its new fund, appoints Yael Alroy as partner

Viola Ventures, an Israeli VC, has closed its sixth fund of $250M. It now has $1.25B in assets under management, largely early-stage tech companies. Viola says the fund was oversubscribed and reached its hard cap. With the new fund, Viola Ventures will invest in 25-30 early-stage (seed and A-round) ...

View more: Israel’s Viola Ventures hits $250M for its new fund, appoints Yael Alroy as partner

The berserk pace of fintech investing outshines the global VC boom

The global startup fundraising boom has lifted nearly every sector you can name: Edtech took off during the pandemic, software in general got a lift, and even more risky and long-term wagers like space tech and biotech are seemingly doing well in today’s risk-on startup fundraising market. But no single ...

View more: The berserk pace of fintech investing outshines the global VC boom

Inflection raises $40 million for its second crypto-focused fund

Early-stage venture firm Inflection has raised a new found to invest into the “open economy”, as the firm says in its investment thesis. With that term, the firm means that it plans to cover all things crypto, web3 and blockchain with its new $40.7 million fund. Limited partners in the ...

View more: Inflection raises $40 million for its second crypto-focused fund

Mayfair Equity Partners aquires UK adtech platform LoopMe for $120M

Founded back in 2012, the LoopMe adtech/martech startup focused on brand-based mobile advertising, using AI to deliver measurable outcomes for its users. At its height, it had raised $25m equity and $10m of venture debt (which was fully paid off before signing). But there’s a reason for using the ...

View more: Mayfair Equity Partners aquires UK adtech platform LoopMe for $120M

Why aren’t female founders getting a bigger piece of the pie? Theories abound

Fintech founder Ashneer Grover takes a leave of absence after reports of questionable conduct

ByteDance reorganizes strategic investment team, causes panic

Netflix’s gaming service adds two more titles on iOS and Android

If you want startup funding, don’t make VCs feel ignorant

Softr’s Series A is a reminder that the no-code boom continues

Filmhub, backed by $6.8M from a16z and others, helps filmmakers get their work streamed

How many unicorns are just piñatas filled with expired candy?

a16z, Avenir and Google back South African mobile games publisher Carry1st in $20M round

Gale Healthcare raises $60M to match nurses with empty shifts

When will VCs hit the brakes?

Remote work and cloud adoption lands 1Password with $620M Series C, now valued at $6.8B

OTHER TECH NEWS

;