Want to be an angel investor? The startup scene is full of new opportunities, each screaming for your attention. In this noisy, competitive market, how can a new angel investor tell if a founder is seriously committed and will make the most return for your money? European Business Angel Network (EBAN) is here to share some questions to ask at the first meeting with founders:

#1 Ask what their business is doing

Beware of founders who respond by talking about their product or service, its amazing features and remarkable technical solution (if any). They will have elaborate theories about how their amazing product or service is going to be in high demand and generate astronomical income, but after some more probing questions, they can demonstrate very little meaningful interaction with customers. Basically, they do not really know what they are doing as a business just yet.

Serious founders will respond by talking about their customers, the pain points their business is trying to solve. If you ask more probing questions, they will happily share deep insights about how people are interacting with their product or service and real ways their customers (or potential customers) are ready to generate revenue for the business.

#2 Ask why they are doing it (assuming they know what they are doing)

Beware of founders who try to come up with a half-hearted altruistic story about changing the world with a mediocre dating simulation. As they talk, you can taste that they are actually in it pumped up on glorious stories of miraculous unicorn returns or because they want to prolong their college life by doing fun things instead of getting a boss.

Serious founders usually have a deeply personal story about why they want to solve this particular problem or a very well-considered rational reason along with a passionate co-founder or two. As they talk, you can taste that this team will not abandon their business at the first sight of difficulty, that they do not see it as an easy way to make money and that they are all about growing the company, not their personal paychecks.

#3 Ask what their competition is doing

Beware of founders who proudly proclaim that they are unique or only mention Google or Microsoft doing something vaguely related but essentially different. If you pull out your phone and find their direct competitors on Google, they look devastated and try to discredit the products they just discovered by desperately listing their secondary and tertiary features that are slightly better or may even end up exclaiming “it does not matter, they are just a small startup active in one country”. Fair enough, but it makes you wonder: how are they any different?

Serious founders will never claim to be unique. They will start by mentioning the way their customers are currently dealing with the pain point. They will also demonstrate a reasonable understanding of their market and be realistic about their competitors. You are very unlikely to find a competitor they don’t know about in a quick Google search, as they’ve probably done their research on Google, Yandex and Baidu and even looked beyond the first results’ page. If you do bring up a competitor they have not heard of, their eyes will light up with curiosity, they will be excited to check out their website, test out their product, meet the founders and learn everything they can about the new competitor, so they can do even better.

#4 Ask what their next milestones are

Beware of founders who only talk about finding an investor, raising a VC round, getting into an accelerator. Essentially, be concerned if they only list means milestones, predominantly financial, as they are convinced that money will solve all their product and business development problems.

Serious founders might mention the funding but will predominantly talk about what they want to do for business development: e.g., sell a client they’ve been strategically courting, get an industry advisor that has access to particular expertise and connections, adjust the product to their latest customers’ feedback. Essentially, they will list ends milestones, as they understand that money comes naturally if they provide enough value to customers.

#5 Ask who is on their team

Beware of founders who keep racking up low-involvement team members with shiny credentials, hoping this will impress investors. That genius designer they met at a hackathon who makes an image or two once a month, that dysfunctional salesperson who hits all KPIs but is rude to everyone on the team, that former classmate now working at Facebook who occasionally fixes their bugs. Founders like this may also list anyone who ever gave them advice on their mentors’ slide, with and without consent.

Serious founders will only keep committed, dedicated people, even if their credentials are not as impressive. If they do have a less involved team member working at Facebook full time and helping out on the weekends, they will honestly say so. They will be open about their team’s strengths and weaknesses and have a realistic approach to managing them. They will also obtain consent before stamping anyone’s photo on their pitch deck.

Connect with European angels at EBAN Helsinki 2019 on June 3-4. EBAN Helsinki is organised by Finnish Business Angels Network (FiBAN) in collaboration with Arctic15.

Get you tickets here