A new survey conducted among global investors by Angel Investment Network has shed light on the preferences, motivations, and advice from angel investors.
It reveals angel investors are more motivated by positive impact than ever before while financial fundamentals are crucial, with over valuations revealed as the biggest startup mistake.
Angel Investment Network surveyed investors across our global network to take the temperature of investors in 2024. The key findings include:
Investment patterns
A majority of investors had invested in 10 or fewer businesses, with 28% investing in under 5 and 30% investing in 6-10. Positive impact emerged as a crucial factor influencing investment decisions, with 72% of respondents expressing some degree of agreement with its importance. For many, investing isn’t just about financial gain; it’s about catalysing change and leaving a lasting imprint on the world.
The primary motivations for becoming an angel investor included the potential for high returns (61%), portfolio diversification (40%), access to innovation (39%), hands on involvement in early-stage companies (34%) and the opportunity to assist others (33%).
Startup traits and mistakes
The common traits of successful startup founders that investors backed were a clear value proposition (77%), passion and commitment (57%), strong value and mission (57%), and strong leadership (46%).The most common mistakes made by startups during fundraising included overvaluing the company (31.3%) and inadequate market research (17.9%).
Current investment climate
In the present investment climate, investors are seeking well-capitalised startups with a strong track record. Advice for startups in fundraising includes reducing valuations (49%), planning for longer fundraising periods (44%), and raising smaller rounds (38%). From lowering valuations to planning for prolonged fundraising periods, the advice is clear: tread cautiously and be prepared for the long haul.
Red flags and communication preferences
Red flags for investors researching startups included inexperienced teams, flagged by 63% of investors, no clear path to profitability (62%), no proven business model (46%) andnot having finances in order (44%). Investors preferred regular communication with founders, with a monthly cadence being the most popular choice (53%).
Over the next few weeks we will be digging further into the results and dozens of in person interviews we have conducted with investors to provide our playbook for successfully raising investment in 2024.
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