People traits matter to angels more than you think.
Most angel investors are a very different breed of individual than their money-hungry VC counterparts. A VC will forgive almost any character flaw. They couldn’t care less about your education, and will rarely even remember your name at the end of your pitch. Angels, on the other hand, care more about everything aside from your current profits.
They’ll forgive a lack of market testing in lieu of your personality. They’ll buy into your passion rather than your proven prowess in the market you’re entering. Angels are very much gut-driven individuals. While many don’t have the big pockets like the members of the Shark Tank do, they are in a sense more human in their approach to whom they’ll cut a check to.
While many lists you’ll read focus on an angel’s desire for character traits such as integrity, drive and passion above all else; most fail to really hit on what an angel truly considers as tangible qualities that are worth investing in. Not to mention, so many of the so-called essential people traits are only noticed by angels if they don’t see them. Meaning, they don’t make a conscious effort to look for most of them.
Five People Traits Angel Investors Look For in a CEO or Founder
Here’s a list of 5 people traits angels are really looking for when you approach them for some much needed startup capital (or “please save my failing business” funds, depending on your situation):
This is investor code for a founder’s ability to listen effectively. Angels want to be involved in the business, to whatever extent is agreed upon during negotiations. While a VC may offer their contacts and resources, an angel’s investment is just as much emotional, to an extent, as it is practical. They want you as an individual to succeed as much as they want to see a profit turnover.
So, if you are someone who likes to ask questions, listen carefully, and reply with intelligence, it’ll go a long way with them. Being teachable is a quality that will score you big points while you’re sitting down in a cafe or bar discussing your new business idea with the likes of the Tim Ferriss‘ of the world.
The best ways to demonstrate that you’re not teachable can be shown in many forms:
- Being quick to interrupt when they’re asking questions or making suggestions is one to avoid.
- Trying to answer questions when you clearly don’t understand what’s being asked.
- Being defensive: Acting like every question is an attack on your business or character.
Listen, learn, and treat everything they’re saying as constructive and they just might see you as a teachable CEO worthy of their investment.
2. Relevant Experience
If you have a lot of experience working in your space, with the products/services you sell, this is a huge selling point. Many “working stiffs” decide to open their own business after years of successfully working for others, making them a very safe investment.
If you’re a professional marketer, who has experience selling many different kinds of products, this would also be a huge selling point, with or without product and manufacturing knowledge.
Even if you just have experience building businesses, that might well be enough if the industry you’re looking to enter doesn’t require that you have tons of involved knowledge (such as space exploration or rocket propulsion). In fact, when most angels are asked what experience they look for in the entrepreneurs they finance, “business experience” is often listed among the most important.
Even if it’s just a string of failures up to this point, angels will often go back to #1 and do a gut check about you and your idea.
3. Team Builder
Angels are not just looking for someone who knows how to lead an established team. And they don’t want to work with a lone wolf who spends his time in the bayou building hover boats, who they have to travel through crocodile-infested waters to talk to because you don’t believe in cell phones or email!
Angels want to work with men and women who understand how to build a quality team from the ground up. Men and women who want a solid team backing their every play. This is because angels are looking to get behind high-growth-potential startups; not bootstrapped one-man businesses.
Also, business owners who understand their own weaknesses hire those who can fill in the blanks. The lone wolf believes they know everything and will seek to do it all on their own – usually to both theirs and their investor’s detriment.
If you can admit you’re not the smartest member of your own team, you’ll get double bonus points from smart angels.
Passion does have to be a part of your repertoire. There’s no getting around it. If you don’t love your business but it’s making millions, then VCs should be your investor of choice. Angels want to work with you, they want to be inspired by you.
They want to feel confident in your ability to inspire your team, your distributors, and your customers. Angels are successful entrepreneurs themselves and they understand that a company’s best salesman during the lean startup years usually needs to be the founder.
If you’re not passionate about the business, find someone who is and make them a partner before you go out hunting for extra cash from angels.
5. Product Knowledge
As you’ve learned already, product knowledge doesn’t have to be your main selling point with investors. But it certainly helps complete the circle of trust before they cut you a check.
You can also have a close team member or partner who fills this need, but someone on your team must know enough about your product to convince the angel of its viability in the market.
Every investor is different. Angels are definitely a breed of their own. Some will want to see more than the people traits listed above. Others may expect less.
However, the more prepared you are to launch and/or grow your business, from as many angles as possible, the more receptive any investor will be to your ideas.
Want to learn more about funding? Read our business funding guide.