Become an Angel
Why should you become a business angel?
Personal level: It is deeply rewarding. You get to work with dedicated and smart people of your own choosing, in a field where you have something to contribute with. They will greatly value your help and input, and also appreciate your cash investment, but beware that each other’s motivations and commitments are clear.Monetary level: The highest returns are always for those that come in early. The earlier the better. And yes, there is a clear risk of losing all money invested. But this is where your experience and contacts are key – you as the angel may just be what the startup needs to grow. Angels are happy if they make 10x, 50x or even 150x. Investors are happy if they make 5x or 10x. This is a huge difference. While investors are focused on the money, angels are in it for the journey.
Educate yourself as an angel
There are many ways to become a better angel. Lots is available on the net. You can also take part in structured programs like what BAN Norway is facilitation each fall and spring. You can take part in pitch days at a number of incubators or co-working spaces across Norway.
Strategies and tips
Be clear about your commitment level, time available, money available now and later, willingness to actually use your connections – and how often the startup should interact with you.
Manage expectations before you agree to anything. Think portfolio – can your portfolio of companies complement or help each other?
Think through what your role is. Are you Friends Family Fools (FFF), an angel or an investor? You may of course have different roles in different cases, but when do you have each of these roles? And when are you intending to move between these roles?
What are your investment criteria? How set in stone are they? What does this make you in the eyes of the startup’er? What is your investment strategy? We should all invest in different baskets or categories, balancing our portfolio of investments. How many do you have in each basket? Risk profile for each basket? Right level of risk for each? How many should you have in high-risk startups and in lower-risk startups? Rebalance?
Are you ready for pre-founding, pre-seed or seed? Where can you add most value? Dealflow – how do you find your cases? Why do come to just you? All of these questions are important to ask before during, and after you invest. BAN Norway provides courses on early stage investment every fall and spring and is always on the look out for new angel investors that can join our network