Beware Phony Angel Investors
There are a ton of phony angel investors out there just waiting to waste your time.
They’ll use the veneer of being an angel investor to try and win your business as an ‘introducer’ or worse. They’ll promise to help you raise money, make intro’s blah de blah in exchange for 5% of your company or worse. And they’ll never invest a penny. Yep, Mr 5%’er. Avoid him like the plague.
Here are 10 tips on how to spot one:
1. They lurk in Meetups
2. They were the founder/CEO of some company you’ve never heard of
3. They keep telling you how great they were and how much money they made
4. They made their money on the Web
5. They have a swanky name/title or big house in the country (particularly popular in Europe)
6. They’re expert at dodging the question ‘would you like to invest?’ but sometimes reveal the following traits
7. They’ve joined a load of (online) angel groups and may have been kicked out of a real angel club
8. They spend too much time networking on Linkedin, Facebook and Twitter
9. They keep telling you about the other companies they supposedly work with/sit on the board of
10. They don’t have a proper day job
Real angel investors are low key, have made real money and have/had a real career which you can Google. If they like you and your business they’ll quickly tell you whether they’ll invest and about how much. They will also effect a couple of valuable introductions and pretty fast.
Spend time with real angels – not the phony’s!
December 28th, 2009 at 5:33 pm
Good points all!
One simple (albeit not infallible) way to check one part of an “angel's” background is to see if an “angel group” that s/he claims to belong to is listed in the free Angelsoft investor search engine (http://angelsoft.net/startup-tools/investor-search). Angelsoft is the official software of the national angel group federations in most of the countries that have them, and Angelsoft itself does some pretty decent checking for legitimacy before they allow a group to use the platform.
So if an angel claims to belong to an angel group, but that group is neither an accredited member of a national angel federation (like the Angel Capital Association in the US, the National Angel Capital Organization in Canada, the Australian Angel Investors Association, or EBAN, the European Business Angel Network) nor listed independently in the Angelsoft search engine, you might want to be extra careful…
December 28th, 2009 at 11:33 pm
Good points all!
One simple (albeit not infallible) way to check one part of an “angel's” background is to see if an “angel group” that s/he claims to belong to is listed in the free Angelsoft investor search engine (http://angelsoft.net/startup-tools/investor-search). Angelsoft is the official software of the national angel group federations in most of the countries that have them, and Angelsoft itself does some pretty decent checking for legitimacy before they allow a group to use the platform.
So if an angel claims to belong to an angel group, but that group is neither an accredited member of a national angel federation (like the Angel Capital Association in the US, the National Angel Capital Organization in Canada, the Australian Angel Investors Association, or EBAN, the European Business Angel Network) nor listed independently in the Angelsoft search engine, you might want to be extra careful…
September 12th, 2011 at 8:40 am
many of the business lending company are good in promising to help their investors to raise there money make some intro’s so that the people will attracted and to invest to their company but in the end …it was nothing…I’m so impressed this angel cause they guarantee a good quality of service to satisfied their client..Thanks!
October 21st, 2011 at 12:58 am
you will find many industry financier are actually fantastic through possible for helping his or her’s businesses to boost furthermore there profit get numerous intro’s so that the families definitely will drew and then dedicate at their business enterprise and yet at the conclusion… it’s not a single thing… So i am which means floored this unique angel purpose many confirm an outstanding good from system towards thrilled his or her’s patient.. Thanks a lot!