A recent survey by Worthworm showed that 46 percent of investors regret making an investment in 2013. Angel investors who participated in the survey made approximately USD 20 billion in bets into 60,000 companies a year. The survey examined the attitudes and outlooks of American angel investors to find out what they like and disliked.
Worthworm cofounder Alan Lobock said, "While we often hear about pitching angel investors, we don't often get insight into their top reasons for investing and what turns them off. What entrepreneurs really need to hear is what will end a meeting with a potential investor before it even starts. Our research clearly shows that angels believe the majority of entrepreneurs do not do their homework before stepping through the door."
The number one reason why angels in the survey regretted investing was due to financial projections that were overly optimistic. Early-stage valuations were definitely and most certainly hard to gauge with valuations soaring to the highest levels in over a decade.
Worthworm's survey also found out that high premoney valuations, bad fit between investors and startup management, flawed strategies were the main resources of regret as angel investors essentially get less bang for their buck in the process.
With this in mind, investors basically prefer that entrepreneurs didn't blow a lot of hot air with all the smoke and mirrors, the survey indicated.
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