What are angel investors looking for in a startup?

Launching a startup is no small feat, but securing the funding necessary to turn a promising idea into a thriving business is another beast entirely.

So what is it exactly that angel investors are looking for in a startup?

Gulf South Angels is a New Orleans-based angel investment group with 135 members across 12 states. The group has invested $23.5 million in 57 companies across 20 states. Mike Eckert, who chairs the fund’s board of directors, recently sat down with Business Report to share his insights.

1. Market opportunity

According to Eckert, angel investors want the product or service a startup is offering to address a real problem with a scalable solution.

It’s important that a startup demonstrates a thorough understanding of its market and the scope of the problem it’s trying to solve, as a well-defined market with demonstrably high demand goes a long way toward building investor confidence.

As Eckert puts it, “How large is the problem? Is it like two people or is it China?”

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