By Jodie Cook,Senior Contributor
Copyright forbes
8 things angel investors really look for when investing in a business
You’ve built something promising. You’ve got traction, vision, and the hunger to scale. Now you need funding. But standing between you and that angel investment check is one crucial meeting where everything matters.
Venture capitalists review up to 20 decks per day. Angel investors collectively back roughly 70,000 startups annually, yet 90% of those companies will fail within the next few years. The odds seem brutal. But investors hunt for specific signals that separate the winners from the walking dead.
I asked seasoned investors what makes them write checks versus walk away. Their answers might surprise you.
What makes angel investors say yes to your startup
A founder that tracks their time
Andrei Komissarov, tech entrepreneur, angel investor, and patent holder with over a decade of experience in AR and AI, looks for something most founders overlook. “I always look for a founder who actively uses time trackers to monitor their day,” calling it a simple but powerful signal of discipline and self-management.
“As a former founder myself, I know how vital it is to truly own your time. Not just create schedules, but also measure where the hours actually go,” added Komissarov. He doesn’t mind how they do this. “It’s less about the exact apps they use and more about whether they truly control their schedule.” Do you know where your time goes, and could you explain it during your pitch?
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A track record of success
“I look for a track record in finding product market fit, which reflects in healthy revenue in a suitably short window of time,” says Seena Rejal, two-time AI founder, ex-venture partner at Fraser Finance, and deep tech investor across the US and UK.
One red flag that will make him walk away? “If it’s been a long time since the company was established, with little exciting traction since.” Investors want to see momentum, not just ideas. If you’ve been working on the same concept for years without meaningful progress, it’s time to pivot or prove why patience will pay off.
Authentic and open honesty
Dan Fugardi, Chairman & CEO and angel investor who invests once or twice per year, said it’s not about the company. “These are all almost 100% investments I am making into the person rather than the business.”
“I look for unapologetic honesty. The unapologetic part can be off-putting to some as it could be mistaken for arrogance, but balanced with someone who you can see clearly has basic empathy, ethics, humility and does not prioritize money over human decency.”
His biggest red flag? “Someone who feels the need to put on a show. When dealing with these types, you are always talking to their publicist.” Fugardi knows why this matters. “If you consider a publicist’s job, it is to spin a narrative and cover things up. I believe this indicates a deep-rooted need for validation.” He’s learned his limits. He doesn’t invest in those founders.
Knowing the market chessboard
“In my experience, it often comes down to founder market fit,” explains Tim Hoag, managing partner of Legion VC. “The best founders pair a crystal-clear vision with the scars and experience from having lived the problem before. Ideally, they’ve already built versions of the product in a prior life, testing and iterating it on someone else’s dime, and now have clarity on what greatness looks like.”
Hoag knows what makes him excited: “When it’s clear that the founder knows the market chessboard, has sound industrial logic on what makes them structurally different and gives a compelling pitch that makes me recommend the company to friends, it’s a rare combination worth backing.”
But he’s selective, and walks away over 95% of the time. Reasons include “lack of grit, weak differentiation, no depth of experience, or simply being unconvincing.” Hoag added that venture is a game of outliers. But he doesn’t say no to most businesses “because they’re ‘bad’ businesses, but because they haven’t yet demonstrated true breakout trajectory.”
Knowing why it might fail
Paul Feinstein, CEO and founder of Audent Global Asset Management, asks one question that reveals everything: “How will this project fail?” He said this “quickly brings red flags to the fore. Regardless of the potential of a project, there are a million reasons even a good concept can fail.”
Feinstein sees the bigger picture. “A business can run out of funding runway due to unforeseen changes in burn rate, changes in market demand for the product and larger macro issues (tariffs, supply chain issues, global recessions). These factors simply can’t be baked into the cards. A founder who is unable to acknowledge or address the downfall potential and help us get a point of comfort with the risk versus reward of an investment is not worthy of our investment capital.”
Coachability of the founder
Ariane de Bonvoisin, a former venture capitalist turned entrepreneur and active angel investor across the US and Europe, values coachability above all else. “Founders need to be open to receiving feedback, working with someone to see their blind spots and limiting beliefs and have a desire to always improve on their self awareness and personal growth.”
Her reasoning goes deeper: “A founder needs to grow faster than the company they are building. Nike would never invest in an athlete who doesn’t have a coach. Investors should never invest in a founder who isn’t open to getting a coach to help with the journey.”
Chris Kaufman, co-founder of StockX and founder of investment and advisory firm West Grand, echoes this sentiment: “Someone who is open to learning, adapting, and growing their team. A red flag is overconfidence. If a founder thinks they already have all the answers, I’m walking away.”
A good grasp of the numbers
“The number one thing I look for: do they have a strong grasp on their numbers,” says Brian V. Folmer, who runs FirstLook Ventures which invests in Series A and B consumer brands with an average check size of $450K. “When you boil the ocean, businesses are largely a math problem. If the founder (or their team) doesn’t excel here, it’s a quick pass for me.”
He sees another warning sign too often: “The one red flag that makes me walk away: unjustified sky high valuation. I can respect a premium valuation if the potential is there. Otherwise, a high valuation with no justification tells me this founder doesn’t understand how the game works.”
Just being likeable
Sometimes the simplest test matters most. “The red flag for me is unlikeability,” admits de Bonvoisin. “I want to work with people I like, people I want to receive emails from, have board meetings with and long productive conversations. Investing in a founder means years of working together.”
She applies what she calls the ‘airport test’: “Do I want to be delayed in an airport with this person for 5 hours and then sit next to them on the plane, and then have dinner with them when we get to the hotel before our meetings the following day?” If the answer is no, the investment won’t happen.
Angel investors want founders who do these 8 things
Angel investors see hundreds of pitches. They invest in a tiny fraction. The difference between a yes and a no often comes down to signals you might not expect.
Track your time. Show momentum. Be brutally honest. Know your market inside out. Understand your failure points. Stay coachable. Master your numbers. And yes, be someone investors actually want to work with.
These investors shared their secrets. Now you know what they look for. The question is: will you be ready when they look at you?
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