While every business is different, the Niagara Angels typically evaluate a company with the following criteria:
Fundable Management Teams We like management teams that have a proven track record of success. This might be in their sector of expertise or through their experience in prior start-up companies. Aside from strong leadership capabilities, we like teams that are comfortable receiving input from our investors. They must be coachable!
Size of the market opportunity: We like to invest in companies and technologies that solve major problems in large target markets. You should have identified a distinct, and growing, market segment. In another words, there must be significant demand for your proposed solution. Customer validation is key!
Sales/Marketing: There must be a clear sales strategy and channels to market. You must be able to scale the business to succeed.
Competitive advantage: Have you taken the time to properly identify potential competitors? We like to see a competitive advantage in the form of proprietary technology/IP or channel to market. You need to be either in an under serviced niche market or clearly have a significant competitive advantage in a crowded market space.
Technology: We like to see that the technology has been validated. We want to know it can be supported by empirical data and/or credible third-party experts.
Intellectual property: You need to make sure that your IP does not infringe on patents or trademarks held by others. Hence, we like to see that steps were taken to protect your intellectual property. This involves exhaustive search and due diligence.
Sales strategy You have a plan to achieve widespread market penetration for your products and services efficiently (internal, direct sales or via external channel partners). You must be able to manage the scale the business to succeed.
Profit potential You can demonstrate how healthy margins and consistent revenue, cash flow growth will be achieved.
Capital needs/Use of funds: Typically our members are prepared to invest individually anywhere from $10,000 to $100,000 per deal to finance such things as product development, working capital, sales or marketing. Our investments are focused on rapid growth of the company and on the company’s ability to hit key milestones.
Exit strategy: All Angel investors want a viable exit strategy. While Angels are patient, they strive to generate returns of at least 10 times their initial investment within five to eight years.