It is estimated that up to 80% of startups do not reach their fifth anniversary. In the case of Uganda, 50% of businesses do not reach their third anniversary. Various reasons are cited for a startup’s failure including a lack of capital (cash to burn), to this end it is important that a startup is able to attract capital / investors early.

While investors in startups include family and friends who may invest in a startup because of emotional and social support reasons. There is a need to attract the next type of investors, Angel Investors, who are the bridge to Venture Capital investors and are usually the first experience a startup gets of financial investors. For Angel investors, investing in a startup is driven by the need to make a financial return over and above any social and emotional reasons. Therefore, the aim in identifying suitable startups to invest in for angel investors, is to pick those with the greatest chance of success that will bear out returns commensurate with the risk investors are taking by investing at a very early stage of the business lifecycle (highest risk).

What then do Angel Investors look out for and what should startups demonstrate to increase their chances of success and thus become more attractive to Angel investor funding?

The Idea: It is important that there is a clear demonstration of the pain point being addressed by the Startup, is there a clear need and more importantly is the idea scalable? Generally Angel Investor will look more favourably on an idea that creates a new market and or provides a new way of solving a problem or taps into a…