I’ve sat across the table from hundreds of founders. Some were ready. Some weren’t. The difference is rarely about the idea. It’s about preparation.
If you’re thinking about approaching an angel investor, here’s what you actually need to have sorted. Not the glossy version. The real one.
Know your numbers
You don’t need a 50-page financial model with projections out to 2030. Nobody believes those anyway. What you do need is a solid grip on your unit economics. How much does it cost you to acquire a customer? What’s your gross margin? How much cash are you burning each month, and how long will your current runway last?
I’m not looking for perfection. I’m looking for awareness. If a founder can’t tell me their monthly burn rate without checking a spreadsheet, that’s a red flag. If they can rattle off their numbers because they live and breathe them, that tells me something much more important than any forecast ever could.
Revenue matters too, even if it’s modest. We invest in businesses that have something working. You don’t need to be turning over millions, but you need to show that customers are willing to pay for what you’re offering.
Understand your market properly
Please don’t show me a slide that says your total addressable market is £4.7 billion. Every founder has one of those slides and they’re all meaningless. What I want to know is: who actually buys from you? Why do they choose you over the alternative? And how many more of those people are out there?
Real market understanding means you can name your competitors and explain honestly what they do better and worse than you. It means you know the buying process your customers go through. It means you’ve spoken to enough of them to understand their actual problems, not the problems you wish they had.
Have something that works
We don’t invest in ideas on napkins. Full stop. We back businesses that have a real product or service, with real customers, generating real revenue. It doesn’t have to be huge. But it has to exist.
The reason is simple. Anyone can have an idea. What separates the founders who succeed from the ones who don’t is the ability to take that idea and turn it into something people will pay for. If you’ve done that, even at a small scale, you’ve already proven the hardest part.
Know what the money is for
This one trips up more founders than you’d expect. When I ask what they’ll do with the investment, too many say something vague about hiring or marketing. That’s not a plan. That’s a wish list.
Capital from an angel investor should go towards growth. Scaling your sales team. Expanding into a new market. Building the next version of your product. Hiring a key person who will unlock a specific capability. It should not be covering wages, paying rent, or plugging operational holes. If you need money to survive, you’re not ready for investment. You need to fix the business first.
Get your legal house in order
Before any money changes hands, we’ll need to see that your company is properly set up. That means your Companies House filings are up to date, you have a shareholders’ agreement in place, your intellectual property is owned by the company (not by you personally), and your cap table is clean.
If you’ve got outstanding disputes, messy equity arrangements from a co-founder who left, or IP sitting in someone else’s name, sort it out now. These things don’t get easier to fix. They get harder.
Understand SEIS and EIS
If your company qualifies for SEIS or EIS tax relief, that’s a significant advantage. It makes your proposition more attractive to investors because the tax benefits reduce their downside risk substantially.
You don’t need to be an expert in the tax code. But you should know whether your company qualifies, and ideally you should have applied for advance assurance from HMRC before you start approaching investors. It takes four to six weeks and it removes a major question mark from the conversation.
Be ready for honest conversations
Every business has weaknesses. Every founder has gaps in their experience. The ones who impress me most are the ones who can talk about those things openly, without getting defensive.
If your churn rate is too high, tell me. If you’ve never managed a sales team before, say so. If your biggest competitor just raised £10m, don’t pretend they don’t exist. Honesty is the foundation of the relationship we’re going to build together. If you start by hiding things, that relationship is already on shaky ground.
Be coachable
This is the one that’s hardest to prepare for, because it’s about character rather than documents. At Lomond, we’re hands-on investors. We attend board meetings, challenge assumptions, and push founders to think bigger. That only works if the founder is open to it.
Coachability doesn’t mean being a pushover. The best founders we work with push back, disagree, and defend their decisions. But they listen first. They take feedback seriously. They change course when the evidence says they should, not just when their ego allows it.
If you can tick most of these boxes, you’re in a good position to approach an angel investor. If you can’t, that’s fine too. Now you know what to work on. And when you’re ready, we’re here.