Understanding what drives angel investors is essential for any startup seeking funding. It’s not just about showcasing your business’s strengths; it’s about stepping into the investor’s shoes. After all, angel investors are more than just financial backers; they bring invaluable expertise, mentorship, and network connections.
This article takes a deep dive into the motivations of prominent investors. What are their priorities? What do you need to know to secure their support?
Motivations Behind Angel Investing
Our recent global survey of investors across our network looked at the motivations of investors across our network. The primary motivations for becoming an angel investor included the potential for high returns (61%), portfolio diversification (40%), access to innovation (39%), hands on involvement in early-stage companies (34%) and the opportunity to assist others (33%).
Christian Teichmann, Managing Director of Burda Principal Investments, is driven by curiosity and a quest for the next big thing. He states, “I am a highly curious person and, as a VC investor, I have the opportunity to come across the next big thing every day. It excites me every morning to think about what will succeed, what constitutes a business, and what is merely a feature.”
For Teichmann, the joy of discovering and nurturing innovative ideas, combined with the challenge of building businesses and generating returns for investors, is the core motivation.
Guiding startups through early challenges
Cristina Bullon Gomez, an experienced angel investor, views her role as symbiotic with startups, essential for supporting company growth. “After many years working alongside startups, I recognise the vital role of capital investments. This not only benefits investors in achieving ROI but is equally crucial for startups to foster growth and expansion,” she explains. Her passion lies in guiding startups through early-stage challenges, particularly in sustainability and technology sectors.
Ben Legg, an angel investor and startup founder, emphasises the personal satisfaction and long-term benefits of angel investing. “Being an angel investor gives me three benefits: Insight, pension, and a warm, fuzzy feeling,” he says. Legg’s focus on mentoring promising founders and supporting innovative ideas in the future of work, defense, and interactive technology sectors drives his investment choices.
Bryony Marshall, another experienced angel investor, is motivated by the opportunity to directly support diverse founders and innovative ideas. “For me, angel investing is a way to directly support innovative ideas and help amazing founders on their mission to change the world,” she states. Marshall is particularly interested in healthtech and the impact it has on improving people’s lives.
Conor Sharpe, Co-Founder of CircleRock Capital, highlights the dual motivations of learning from ambitious entrepreneurs and the potential for high financial returns. “My motivation to become an angel investor was two-fold: to meet incredible people with huge entrepreneurial ambition and learn from them, and to capitalise on the potential for high returns,” he explains.
Tailor your pitch
Angel investing offers a unique opportunity for both founders and funders. For startups, it’s a chance to secure crucial capital and guidance. For investors, it’s a chance to discover groundbreaking ideas, shape the future, and potentially reap substantial rewards.
While there are many different motivational factors for angels it is crucial to do your research for any pitch meeting you do secure and ensure you tailor your presentation accordingly. What makes the investor you are speaking with want to get out of bed in the morning?
By understanding what drives these individuals, you can open the door to valuable partnerships that propel your business forward.
Picture credit: Angel investor Cristina Bullon Gomez
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