Whats reasonable to ask for before you invest $10K-$20K
A couple of entrepreneurs asked me whether I'd be interested in investing in their project at a very early stage. The question arose, what kind of information would I need (and by extension would any other potential angel need) to see before even considering this?
- Most obviously, what would the investor get for their funds. What are the legal/financial terms. Exactly what would the 'paperwork' look like.
- What is the total amount they want to raise this time around? What they plan to do with the money and what do they think they will need to accomplish before needing to go back to angels for more.
- Any references, recommendations, early validation from experts in the field, or potential or actual customers.
- What their immediate next steps are, what assumptions are they trying to validate, what do they think they know already about the product, market, manufacturing, pricing, customer needs, competitors and so on.
- I know they that have potentially patentable IP. What are their plans around patenting, how soon will they tackle this and in what way.
- What individuals are working with them, are they planning to bring on board, are eager to join, and their backgrounds.
Hmm. Am I asking too many questions for a 'mere' $10,000?