Ask An Angel – What is your investment criteria?

Our team is frequently asked “What do you look for in a company?” OR “How come you didn’t investment in my company?” 

Each angel investor is unique in how or what they invest in based on their investment thesis, their areas of interest, their preferred deal structure and other variables

We thought we would ask some of the Valhalla Angels team (who actively invest with their own money) to name the top 5 things they look for in a company and share their thoughts.  

You will notice some common themes as they evaluate companies and it is worth noting that our team has exposure to over 2000 deals annually.  Founder, Team, Traction, Deal Terms & Structure … in no particular order.

As a company looking for investment … REMEMBER, Angel Investors are investing THEIR OWN MONEY … so the decision is ultimately theirs.

Ryan Heit: Co-Founder & Deal Screening Director

  1. Founders: Is the team the right team and do I get along with them?
  2. Market size combined with market fit: The market size needs to be attractive and the team’s ability to demonstrate that they have a value proposition that will resonate in that market
  3. Market traction of some sort: Do they have beta testers, customers, partnerships, investors from that sector? They need to demonstrate some how they have been able to generate traction in their space, but this traction need not be revenue.
  4. Sector expertise: Do they know the competitors, do they know why they’re better than their competitors, do they know about the potential acquirers, do they know recent transactions in the space? It goes a long way when a founding team can answer any question we can think to ask about the space.
  5. Reasonable terms: Everything else could be awesome, but if you’re overvalued, you’re overvalued.

Luke Krueger:  Co-Founder & Chapter President Calgary & Vancouver

  1. Customers:  ideally paid but it depends on the business. 
  2. Team: A “kick ass team” to be exact. One who deeply understands the problem they are solving and has scaled a company before. Do the founders know their business intimately and know how startups work? Negative points for MBA’s (jk) 
  3. Deal Structure: Is it reasonable or is it out to lunch?
  4. Other Advisors / investors / programs: Have I heard of them? Example, 500 startups or Mark Cuban 
  5. Founder: Do I like him/her?

Grant Lawrence: Co-Founder & Chapter President Kelowna & Vancouver

  1. Traction:  revenue or downloads or paid trials, LOIs/MOUs – or a combination of these
  2. Team:  Experienced team. One who understands the problem they are solving as well as the startup space. What is their experience in scaling a company?  Do the founders know their business inside and out?
  3. Skin in the game: Investment from Founders, Family & Friends
  4. Other Advisors / investors / programs: Who has the company engaged with and are active in their company
  5. Exit: what serious steps have they taken to think about and act on their exit / give back plan?

More Angels Coming Soon!