How do you due diligence as an angel investor?
How do you due diligence as an angel investor? 3 Guiding Principles of Due Diligence
Identify Key Risks. Develop the Investment Thesis. Acknowledge “What Needs to Be Believed” to Invest.
What are the documents required by angel investors?
- Term Sheet.
- Stock Purchase Agreement.
- Disclosure Schedule (or Schedule of Exceptions)
- Investor Rights Agreement (also sometimes Registration Rights Agreement)
- Voting Agreement.
- Right of First Refusal & Co-Sale Agreement.
What do angel investors need to know before investing? Investors will absolutely want to know how their capital will be invested and your proposed burn rate (so that they can understand when you may need the next round of financing). It will also allow the investors to test whether your fundraising plans are reasonable given the capital requirements you will have.
What do investors look for during due diligence? Due diligence is defined as an investigation of a potential investment (such as a stock) or product to confirm all facts. These facts can include such items as reviewing all financial records, past company performance, plus anything else deemed material.