10 Important Principles of angel Investing

1. 10 Important Principles of angel Investing What rules might a “higher investingpower” pass on to angel investors, to help in their quest for success in early stage companyinvesting? Although not necessarily etched in stone, we’ll take a stab at what might be considered the “10 Rules of Angel Investing”: a set of basic rules for early stage companyinvesting. http://cosmosgroup.ae

2. 1. “Profit is the UltimateGoal.” • Angel investing is notcharity. • Invest to create successfulcompanies. • Invest CreateGrow Exit (M&A orIPO). • The goal is to yield profits for futureinvestments.

3. 2. “Invest in GreatTeams.” • Avoid single member “mad scientist”investment. • Great entrepreneurs build greatteams. • Great teams can overcome mostchallenges. • Try to find, and fund, great teams(business • experience, business diversity,attitude).

4. 3. “Invest in BigIdeas.” • Look for big idea, where market isheading. • Avoid the “me too” investment (similar ideasin • crowdedfield). • But: big idea must be backed up withdata.

5. 4. “Invest in LargeMarkets.” • Large markets allow for growing pains;“larger • field”, more “playingtime”. • Large markets support inevitablecompetition. • Even “somewhat successful” result mightyield • “large exit” in a largemarket.

6. 5. “Know The ValuationRange.” • Angel investing is risky investing, don’tovervalue. • Companies should be reasonablypriced. • Use “comps” of similar companies butalways • adjust forrisk. • Remember: failure more likely than success,don’t be afraid to walk away, there will always be anotherdeal.

7. 6. “Always Do DueDiligence.” • Angel investing is full of “unknownunknowns”. • Use your due diligence time to uncoverthem. • Take nothing for granted, bethorough.

8. 7. “Support YourCompanies.” • Keep “dry powder” for future investmentrounds. • Listen and advise where you addvalue. • Help “keep the faith”: start-ups succeedwith persistence andpatience.

9. 8. “Create an InvestmentPortfolio.” • If one or two out of ten or twenty are“homeruns”,you need a portfolio of co.’s to increaseodds. • Invest where comfortable butdiversify. • Be patient: a good investment portfolio takestime • todevelop.

10. 9. “Know When to Fold‘Em.” • Don’t throw good money after bad indeals. • Don’t just chase the “homeruns” (100Xexits). • Reasonable returns in a reasonabletimeframe (doubles, triples etc. keep you “in the game”).

11. 10. “Give More Than You Receive.” • Always be teaching, as well aslearning. • Mentor and help entrepreneurs and startups, even those you may pass on, forinvestment. • Those you help, may later help you oneday.

12. C I. “Profit is the ultimategoal VI. “Always do duediligence.” O II. “Invest in greatteams.” VII. “Support yourcompanies.” S III. “Invest in bigideas.” M VIII. “Create an investmentportfolio.” O IV. “Invest in largemarkets.” IX. “Know when to fold„em.” S V. “Know the valuationrange.” X. “Give more than youreceive.” GROUP

13. Who are the “COSMOS GROUP” Cosmosgroup.ae is an angel investment company which provides comprehensive support to the budding community of start-ups and entrepreneurs in the Middle East region. Our team of experienced internet entrepreneurs have partnered and counseled several web start-ups in the region. We respect the spirit of entrepreneurs and start-up community. And it is disappointing to hear about a potential start-up not able to scale up due to lack of funds. When we provide financial backing for such startups or entrepreneurs, we invest in the person rather than the firm’s viability. This helps us focus on helping the business succeed under any circumstances.

14. C O S M O S GROUP http://cosmosgroup.ae