The critical factor in angel investors selecting a business opportunity is the affinity of the investor to the business. An affinity is a natural liking or attraction. It’s what an investor cares about other than the money.
Common thinking on angel investing is that money is the only thing that an angel investor cares about. For some angels this may be true.
However, there is a growing recognition that investing is not that simple. Impact investing is an example of where supporting a social cause has been given priority over making a profit. Another form is friends and family investing (ignore for the moment that this is often criticized). Recently, I have advanced the concept of ‘strategic’ investment – a commitment of capital to advance the success of a business.
The recognition that investing may be based upon emotion or a sense of community or even religious grounds moves the act of investment back within the realm of marketing – why does the investor care?
This question must be answered by the entrepreneur seeking capital, the investor making an investment choice, intermediaries who are matching entrepreneurs and investors as well as economic development agencies improving access to capital.