Conventional wisdom says that private
equity investors should place primary
importance on the management team. For angel investors, future
financing risk is also a critical consideration. Here’s why:
Angel Investors typically invest after friends and family, but before “institutional money” (VCs and the like). This is inherently dangerous because of the risk of falling into the funding chasm (see my post on the funding chasm).
Even if the team, market and product all look exciting, a savvy angel investor should separately evaluate the probability that the company can raise their next round of capital. To do this analysis, here is a good set of questions to ask:
To read the full, original article click on this link: Financing Risk = The Angel’s Achilles Heel
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