Key criteria angel investors should focus on when selecting potential investee companies.

1.
This document is for informational purposes only and does not constitute solicitation of an investment or an offer of
investment advisory services. The document reflects the general views and opinions of Symfonie Capital and does not
constitute a statement of investment policy. Investing in startup and early stage companies is risky. Investors may lose
the full amount of their invested capital. Investors should take extra care to be informed of the many types of risks
associated with investing in startup and early stage companies. © 2014, Symfonie Capital, LLC.
Baseline Criteria for Angel Investments
Preface
The following is a general list of criteria the Symfonie considers to be important when assessing
an investment opportunity. The Baseline Criteria is not a binding set of rules, either in part or in
whole. The Baseline Criteria are designed for general guidance as a framework to determine the
attractiveness of various investment opportunities either individually or relative to other
opportunities. Other factors also may be taken into consideration when forming an investment
opinion. Investors should not rely solely on the Baseline Criteria when making an investment
decision. This edition of Baseline Criteria was produced for publication 12 May 2014.
Company, Products, Markets
The entrepreneur has a demonstrated understanding of the product and the industry in which
he/she operates.
The entrepreneur and the management team have a set of managerial and business skills that is
appropriate for the size, scale and scope of the business.
The proposed product or service is readily marketable in the near term.
There is identifiable, proven demand for the product or service.
The product or service has unique features and benefits that provide competitive advantage
versus similar products and services.
The business is scaleable – it can be developed, and grown over time.
Production and Operations
Changes in technology are likely to positively impact the company and the product or service
offered. For example, technology change can stimulate new demand, reduce production costs
or enable a company to develop competitive advantage.
The product or service can be produced cost efficiently in small quantities.
The project is not highly capital intensive. The tranche of money raised from angel investors is
sufficient to fund the company’s next stage of growth and development.
The project’s success is not contingent on a series of continual capital raisings.
The company can be financially self sustaining in the near term.

2.
This document is for informational purposes only and does not constitute solicitation of an investment or an offer of
investment advisory services. The document reflects the general views and opinions of Symfonie Capital and does not
constitute a statement of investment policy. Investing in startup and early stage companies is risky. Investors may lose
the full amount of their invested capital. Investors should take extra care to be informed of the many types of risks
associated with investing in startup and early stage companies. © 2014, Symfonie Capital, LLC.
Business Plan
The Company must have a business plan and a financial model. The model should be stress
tested and the key operating assumptions must be available to the angel investor.
The business plan must include putting in place the processes and company organisation that
will attract additional capital or facilitate an exit strategy.
The business must be capable of generating profits in the medium term that would be the
catalyst for fundamental, cash‐flow based valuation.
Corporate Governance and Legal Risks
Corporate governance, fiscal transparency and legal protections for angel investors must be in
place.
The company’s founders and key managers must pass due diligence and background checks.
They must be committed to a set of ethics and business principles that include appropriate
transparency of finance and operations and fair treatment of suppliers, customers, employees
and investors.
The company has no significant potential legal challenges to its property and intellectual capital.
The company owns or has clear, undisputed rights to the intellectual capital and property
needed to do business.
The company faces no significant legal or regulatory barriers to its business plan in the near
term.
Financial Risks
The company must have adequate financial controls in place.
Finance and accounting must be transparent for the angel investor

3.
This document is for informational purposes only and does not constitute solicitation of an investment or an offer of
investment advisory services. The document reflects the general views and opinions of Symfonie Capital and does not
constitute a statement of investment policy. Investing in startup and early stage companies is risky. Investors may lose
the full amount of their invested capital. Investors should take extra care to be informed of the many types of risks
associated with investing in startup and early stage companies. © 2014, Symfonie Capital, LLC.
Deal Structure and Investment Horizon
Terms of investment should include adjustment mechanisms that prevent dilutive share issues.
Investment pricing should include risk sharing mechanisms linked to company performance.
Risk sharing mechanism should benefit angel investors in case the company underperforms
expectations and benefit founders and management when company outperforms expectations.
Exits, capital distributions, share purchase offers and other corporate finance transactions must
benefit angel investors before or at least at the same time as they benefit founders and
management.
Angel investors must have either priority or at least pro rata treatment if the company starts
declaring dividends.
The business can eventually be saleable – either via a trade sale or management buyout, sale via
the private equity markets or sale via IPO.
Possibilities to exit within 5 years must be identifiable.
Informed and Active Angel Investors
Angel investors should have a good understanding of the product or service the company sells
and the industry in which the company operates.
Angel investors should be able add value to the project by taking an active role and co‐operating
with company management and founders on the business plans development of the company.
Angel investors should be able to help the company identify new markets, reach new customers
and suppliers, and provide the company advise and mentoring when needed.
Questions? Comments? Our e‐mail address is info@symfoniecapital.com.