4 Tips for Entrepreneurs Looking for Angel Investment

Photos of Angel Meetup 2012 SpeakersAlthough the venture capital industry is now well developed in Ireland, angel (or sophisticated) investing is still playing catch up.

But companies like Xcell Partners are helping to organize investors and to locate investment opportunities for them, according to Eva Kelleher, who handles the Republic of Ireland operations for the investment group.

Kelleher was speaking at the March Last Tuesday networking event for entrepreneurs in Dublin in advance of the April 18 Angel Meetup being organized by Xcell in Dublin.

Seeking to match angel investors with promising early-stage startups, Kelleher said the average investment last year was around €240,000. “The investors in our network have all had their own businesses and exited,” she said. Many of them will have technical background.

When these sophisticated investors find a promising startup, they typically form a syndicate of 4 or 5 people.

Once the group identifies a start-up, it could take four or five months before the investment hits the fledgling company, Kelleher said. Some of the time could be spent on due diligence, which is typically done by the syndicate itself. Or the investors may require that certain milestones be met before releasing funds, she said.

Investment terms aim to be between three and five years, although they have been running longer, Kelleher said. Since one of the investors will take a place on the board, “they are always pushing the exit agenda,” Kelleher said.

For entrepreneurs looking for funding, Kelleher had four tips:

  1. Form a strong team. The investors will be looking closely at the team. A solid track record and previous success will help, she said. Sometimes, the investors may not buy what the entrepreneurs are selling but will want to work with them on another project.
  2. The product or service must have international potential and be scalable. Entrepreneurs who restrict themselves to the Irish market are unlikely to pique much interest, Kelleher said.
  3. The investors need to be confident the team can execute
  4. They will be looking for a return on their investment so a well thought out revenue model is indispensable.

 Montage of Angel Meetup speakers taken from the Xcell Partners website. It is not mine to share. The speakers are: Gavin Duffy, Entrepreneur & Irish Dragon’s Den investor; Bill Liao, Entrepreneur & Micro Angel; Danny Moore of Loughshore Investments; Diane Roberts from the event host Xcell Partners; Nelson Gray, an experienced Scottish investor; Accomplished business leader Leslie Buckley; and the internationally renowned Bill Payne as keynote speaker.