Key factors which have been shown to influence positive returns are:
Take a portfolio approach: Spread your investments across a number of small businesses, in more than one sector, rather than putting all your investment into one business. This will enable you to diversify your risks and increase your opportunities for achieving better returns.
Invest in what you know: Invest in sectors or areas of business where you have experience or prior knowledge. Or invest alongside another angel or group of angels who are experienced in investing in this sector and who will also offer ongoing expertise and experience to the business.
Do due diligence: Carry out at least 20 hours of due diligence and you are likely to make more informed investments, resulting in more successful outcomes and returns. Due diligence should be done to satisfy yourself about investing in the business on all the main aspects of the business including the team, the market and product; legal and financial aspects before making the investment. For more information on due diligence CLICK HERE.
Follow your investment: Keep in touch with the business, providing relevant advice and support, or for example sitting on the Board, or providing business or marketing contacts. This could be done by yourself if you have time and the relevant skills and knowledge, or by an appointed experienced lead angel if you are part of a syndicate.
