Angel Investing: 4 Key Traits to Look for in a Promising Startup

11 January 2024

A range of investment opportunities are waiting to be seized in today's ever-evolving business landscape. Among the most thrilling and potentially rewarding is angel investing. But what's all the buzz about and how do you spot a promising startup?

Why be an angel investor?

There's a certain allure to being among the first to back an up-and-coming venture, especially when the support extends beyond funds to include mentorship and resources. Unlike venture capital firms, which operate on an institutional scale, angel investors are affluent individuals who invest their wealth directly into these startups. In exchange, they acquire a stake in the company. Typically, angel investors can dive into investments at the inception of a company, sometimes even when it's just a conceptualised product.

With the rise of angel investing platforms like StashAway in Singapore, finding and supporting these startups has become more streamlined than ever.

4 key traits to look for in a promising startup

For angel investors, it is pivotal to identify startups with high growth potential to ensure a substantial return on investments. With this in mind, here are four key traits to keep an eye on when evaluating a startup’s viability and long-term prospects:

1. Strong and committed founding team

The core of any startup is its founding team. A dedicated and passionate team can drive a venture from an idea on paper to a tangible, profitable business. When considering angel investing, look for founders who showcase resilience, expertise in their domain, and a clear vision for their venture.

2. Clear and compelling value proposition

Every successful startup taps into a specific pain point or offers a unique solution that stands out in the market. As potential angel investors, it is crucial to identify businesses that present a compelling value proposition. It's not just about what they offer, but how differently and effectively they do it.

3. Large and growing market opportunity

The potential market size for a startup’s product or service also speaks volumes about its growth prospects. For those considering angel investing in Singapore, understanding the local and global market dynamics is essential. A startup that targets a niche but growing segment, or taps into a vast and expanding market, holds promising returns for investors.

4. Early traction

Additionally, while it's true that every big company once started as a small venture, early signs of traction can be a good indicator of future success. This includes an increasing user base, positive customer feedback, or even securing initial sales. Angel investors should be on the lookout for startups that not only have a great idea but also show evidence of market acceptance.

The path forward for angel investors in Singapore

That being said, the startup ecosystem – with its relentless pace and influx of new ventures – can make navigating the scene challenging. For angel investors, it's not just about finding a startup, but zeroing in on one with genuine potential amidst the crowd. This requires discernment as the stakes are high in early-stage investing. So, how can seasoned investors and newcomers identify those golden opportunities?

StashAway, a leading investment platform, has teamed up with the XA Network (XA) to assist StashAway Reserve clients in identifying early-stage technology startups across Southeast Asia that show great potential.

StashAway does the heavy lifting of identifying and assessing startups so you don’t have to.

This makes angel investing straightforward and accessible, irrespective of one's investing acumen. Additionally, what's enticing is the range of investment: from an accessible entry point of just $20,000 USD.

And with an aim to spread these investments across 10-20 startups yearly, Reserve clients gain a well-rounded exposure to the vibrant Southeast Asian startup landscape. Leveraging the combined expertise of StashAway and the XA Network, angel investing can become a more calculated and informed endeavour. Ready to begin angel investing with StashAway Reserve?

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