Don’t scare away capital – Investors share their “Red Flags”

Below are 20 Red Flags that Alarm Angel Investors:

- Company is too early in development

- There’s no team, just one person

- There’s no exit plan

- Exit plan is a long time out (more than 5   years)

- Naïve business plan

- Valuation of company is too high and not negotiable

- Too much additional funding is needed

- Unacceptable use of funds

(Funds used mainly for  executive salaries)

- Market is too small and not growing

- Product is a “me-too” product

- Too much previous debt

- New funds are used to pay off previous debt

- Founders are not coachable

- Crowded market space

- No barriers to entry by competition

- Messy structure of prior investors

- Anemic growth is projected

- Founders really don’t want to sell business

- False or misleading statements

- Weak CEO