Investment criteria
While the merits of each investment will vary, we evaluate your venture according to the following criteria:
Management team
We look for teams with high-quality entrepreneurs that have a track record of leadership and performance - either in the company's specific industry or in prior entrepreneurial ventures. We also look at your team's passion for and commitment towards the new business idea. We consider the latter alongside your ability to inspire confidence among future stakeholders, including employees, potential customers, and investors. As we will be working together as partners, your team's credibility is essential. In addition, your team must be open to and comfortable with receiving input provided by angel investors.
Investment sectors
AQ is looking for innovation companies in the following sectors:
- Industrial, productivity enhancement and manufacturing processes
- Information, communication, imaging and media technologies
- Materials, energy and environment
- Medical devices.
Market
We invest in solutions that address major issues for significant and large target markets. Your company must demonstrate a global strategy or a strategy covering major national markets. There are plenty of great business opportunities but not all businesses will generate returns that justify angel financing. Therefore, market insight is always a material component.
Use of proceeds
Funds must be used to accelerate your company's achievement of key milestones that increase the company's value. This includes research and development operations, particularly at the marketing stage, and hiring key executives.
Growth potential
We look for companies that can develop quickly and, efficiently take charge of their growth and profitability. Your company must propose a plan to generate significant profits and must have a strategy to achieve multiple sources of revenue. We also require well-conceived financial projections, based on sound assumptions, demonstrating consistent profits and cash flow growth.
Competitive advantage
Your company must have some proprietary features that distinguish it from potential competitors or provide strong barriers to entry that prevent other companies from capturing your customers with one or more similar offerings. Attributes that convey competitive advantage include intellectual property protection, exclusive licenses, exclusive marketing and distribution relationships, strong brands, key personnel (i.e. knowledge and skills), and access to proprietary materials.
Connection
Our members, all accredited individual investors, have significant executive experience in a variety of fields. One of the benefits of working with angel investors is the active coaching and contact network that such investors can provide. As such, there must be a connection between the Anges Québec ("AQ") members and your project.
Innovation
We prefer to invest in innovative companies. It is one way to garner a competitive advantage while meeting the needs of the marketplace and follow your company's strategy. We look for need-to-have products or services. Also, we approach highly complex, esoteric technologies with caution. The concept behind the innovation must be proven and demonstrable. Note that we avoid science projects that don't have a clear path to commercialization.
Exit strategy
Our members typically seek returns of at least ten times their initial investment, within 5 to 7 years. This level of return on investment is essential due to the high risk and the likelihood of failure among early stage ventures. Therefore, a clearly articulated exit strategy of how angel investors will obtain such returns, with financial needs detailed for each step of the strategy, is essential. Angel investors are not just interested in the strategy you select, but more importantly in the "how"; the operational strategy must show specific steps you will take to achieve the exit.
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