Maintaining an angel investor relationship

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in Business Management,Small Business Tax

Angels tend to  invest in people more than in ideas. 

Maintaining a positive working relationship with an angel investor will strengthen the business and its growth potential.  The following tips will help preserve the relationship:

Reporting:  The entrepreneur should regularly communicate the progress of the business to the angel through a predetermined mode of communication.  Whether it is weekly, monthly, or quarterly reports, there should be consistent transmission of information between the parties.  These date sensitive reports will enable the angel to keep abreast of the investment.
   
Obligations:  The entrepreneur has an obligation to meet the goals and expectations of the angel who has provided the equity capital.  It is important that the parties have a mutual understanding of these goals and how they will be achieved.  The entrepreneur should allow for open discussion and critique from investors.

Objectives:  The entrepreneur should set reasonable objectives for the venture.  Waiting to disclose foreseeable or actual problems will only cause friction that could ultimately result in a loss of trust.
   
Advice:  The entrepreneur should seek advice from the angel investor if the investor has experience and/or expertise in the industry.  This shows respect for the investor’s skills and promotes camaraderie.

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zelena@deleaoil.com January 23, 2011 at 7:28 pm

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