I talk with a lot of people who need to start understanding how to think about either raising money from angel investors, or being an angel investor. I consider anyone who is considering trading work for equity who is not a founder to also fall into the Angel Investor category as you can easily sink tens of thousands of deferred compensation into a startup.
When I talk to these people I always refer them to a few key resources:
Valuing Pre-Revenue Tech Startups:
This is a must read if you want to understand Angel funding from the Angel’s perspective on what makes an investable company. You should understand this no matter which side of the table you will be sitting on.
Tech Startup Comp Study:
This provides a good idea for what salaries and equity ownership might look like* for both founder and non-founders of startups in various roles.
http://www.wilmerhale.com/pages/EventDetails.aspx?eventId=112740
The Art of the Start: By Guy Kawasaki
This is a great book that helps people understand the mechanics of telling a compelling story to investors. I have provided it to many clients in the past.
*You might have to discount against these numbers if you live outside of the coasts, like here in Indiana for example.
Disclaimer: I am not a lawyer or account. Nothing on this website should be considered as legal, financial, or other professional advice. Unless you are a client of mine, I also am not providing any other type of consulting or advisory services. Please consult your own lawyer or accountant as you see fit.
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