Angel networks score pitches against written instruments. The evaluation guidelines for a startup run to seven question sections and a recommendation, and a shorter questionnaire scores four areas on a fixed scale.
The screening process can seem opaque from your side. Working through the same areas helps you anticipate where investors will see strengths and gaps.
What investor-ready means in practice
An investor-ready company can withstand an investor’s checklist without a surprise bringing the process to a halt. A strong market will not compensate for a broken cap table, which is usually much cheaper to fix.
The screen looks at what exists now. A signed customer, a filed set of accounts and a share register (aksjeeierbok) that reconciles all count; what is planned for the quarter does not.
Investors are scored too, on whether they have the time, the engagement and the expertise for this company, and whether they see a realistic exit. You are entitled to ask them the same questions.
The areas you will be scored on
Score yourself on each area from nought to ten, where ten means an outsider could verify the answer today. A five is a claim you can argue; a ten is a document you can hand over.
| Area | What you are being asked |
|---|---|
| Product and technology | How proven, and at what stage? Market-ready, and if not, are the obstacles realistic? What customer validation exists? Can it be protected by IP rights, how and where? Novel and disruptive, or an improvement, and is the proof or the margin of improvement enough? What are the USPs against similar products? |
| Market | Size, growth and rate of growth, and is it established, emerging or still to be created? How strong is demand, and will it grow? Who are the customers and users, who pays, and where will it be sold? How likely are competitors to do the same at the same cost, who are the big players, and what are they working on? How fast is the technology moving, and why is the timing right? |
| Business model | Are the model and value chain defined? How does the company make money, from how many streams, and which bring repeat payments? Is the price fair or a premium, and what is the margin? Go-to-market plan and channel (direct, business or distributor), and does the sales machinery exist? Paying customers, the cost of acquiring one, depth of customer insight, retention and churn? Does the customer need convincing and training? Sales needed to break even, how fast sales can scale, and how expenses scale with them? Main expenses, and is the budget realistic? |
| Team | Prior entrepreneurship and industry background? Do they really understand the business, and how well do they explain it? Are they realistic about weaknesses, obstacles and the exit? Long-term vision, their role in it, and commitment? How well do the founders know each other, and does the dynamic survive pressure? Diversity? Do the board and advisers bring knowledge, experience and networks, and how involved are they? And the investor’s gut feeling about the team. |
| Cap table | What does it look like, and are there share classes? What do founders, management and key people own? Is there an option plan, how large as a percentage of share capital, or what is the plan to create one? Outstanding options and warrants, and the fully diluted share count? |
| Funding round | Size, and is it equity, a convertible or a SAFE, with any options, warrants or share class? Pre-money valuation against the last round? Soft and hard commitments, and do current shareholders take part? Use of proceeds, runway, and the timing and size of the next round? Target close date, and how long current cash lasts? |
| Other information | Anything relevant that fits none of the above. |
Add the shorter questionnaire’s three financial questions to your sheet: is there a budget, is there a milestone plan, and was the funding need calculated or guessed?
The guidelines end in a recommendation with a fixed shape: the reasons, then size of investment, terms, the people involved, passive or active, and timeline. If you cannot imagine a specific person filling that line in about your company, the screen has not been passed yet.
The instant disqualifiers
Check these before you score anything, because any one of them ends the conversation regardless of how well the rest scored. Most of them test what you are willing to accept.
- Unwillingness to work with active angel investors
- Unwillingness to share ownership and be diluted
- Unwillingness to accept a lock-up on founder shares
- A valuation or cap the investors will not accept
- The team
- The case itself
- Governance
- Title and patent (who actually owns what)
- Due diligence (selskapsgjennomgang) that cannot be completed
- Finance
Founders regularly fail on the first four without ever knowing the business was liked. If you are not prepared to dilute, to be challenged by owners with a vote, or to be locked in for a period, angel equity is the wrong instrument, and it is cheaper to find that out now.
Scoring yourself honestly
An independent view helps reveal gaps you cannot see yourself. Pay particular attention to questions where your score differs from the outsider’s.
- Run it as a written sheet, one row per question, nought to ten, with a subtotal per area.
- Have someone else score the same sheet independently (a board member, an adviser, a founder one round ahead of you). Do not brief them first.
- Compare. Where the scores differ by three or more points, you believe something an outsider cannot see. Each such row is a communication problem or a real gap, and you cannot tell which from the inside.
- Score the evidence only. A customer who has said they are interested is not a customer, and anything unverifiable becomes a diligence finding later.
- Do not average the areas into one number. The lowest three rows tell you more than the total.
Choose your second scorer and the areas to examine most closely according to the company’s stage. The recommendation also becomes more useful as potential investors get involved.
- First raise. Use a founder one round ahead of you, or an angel. NorBAN’s startup services review the deck, team, business plan, go-to-market and technology before you are in front of anyone deciding. Innovation Norway’s free capital-strategy courses cover the same ground; take them before you score.
- Second raise. Cap table and funding round are the rows that have moved since last time: pre-money against the last round, what is committed, and whether current shareholders take part. Ask an existing shareholder to score those rows and say whether they are in; a no from your own shareholders is a finding you will have to explain.
- A lead in place. Ask the lead to write the recommendation line as they would present it to the other investors: reasons, size, terms, people, passive or active, timeline. Where they hesitate is your gap list.
- No lead yet. Nobody will write that recommendation for you, so write it yourself in the third person, as a named investor would. Work first on the areas where you cannot write a convincing recommendation.
Reading the result as a gap list
Sort the rows from lowest score upwards, then consider what each gap costs to close. Start with inexpensive fixes you can complete before meeting investors.
- Company records and filings that are complete and current.
- A share register that reconciles with the cap table you present.
- Founder agreements and vesting actually signed.
- Accounts that tie to the model.
Investors expect these records to be in order and may decline if they are not. Allow a few weeks to put them right.
Other gaps are expensive and slow: no paying customer, a team missing a function the business depends on, a market you cannot document. They set the timing of a raise. Name the milestone that closes the gap, cost it, and decide whether to raise a smaller round to get there or to wait.
The funnel is narrow either way. In a typical selection round, roughly one applicant in five clears the first screen, and single figures reach an investment decision. You are competing against other well-prepared companies, and the gaps you leave open are what separates you.