Source: Authored by: Jay Bigelow, Director of Entrepreneurship, CED

As most or all entrepreneurs already understand, raising equity capital is hard and not for everyone. The first round after your friends, family and fools’ round is really hard if you haven’t done it before or don’t have a high net worth network. For most companies who need to raise capital, the first money in will come from angel investors. But angel investors are not a homogenous bunch. Some are part of formal angel groups or regional networks like RTP Capital , TAP, Venture South, IMAF, CAN, WIN and DAN (using North Carolina and the southeast as an example region). But there are just as many or more that are “non-aligned angels” – angel investors who choose not to be part of a group.

A lot has been written about how to find an angel investor and how angel investors evaluate deals, but what is talked about less is how you, the entrepreneur, should evaluate an angel investor outside of their capacity to write a check.

Finding a Committed Angel Investor

First and foremost, you want an angel investor who will dig in. Someone willing to roll up their sleeves and help you move the business forward. Digging in may take different forms. As my friend David Gardner used to say (when he was first doing angel investing), “I know when I open the box [really get inside the business] there are going to be a few pieces missing.” It’s a truism that most startups won’t have a complete team in the beginning. There may be gaps in finance, operations, regulatory, manufacturing, sales (hope not), marketing or business development. So, one way an angel investor may help is by plugging in some of the gaps temporarily. As you get to know your angel investors, evaluate them to see what their areas of expertise are. Will their expertise help you fill a gap now or in the near future? Do they have the time and desire to fill that gap for a short time or help you find someone who can? You should not be thinking of them as a full-time hire, but rather a non-cash compensated consultant. Temporary support is one form of value-added investing.

Second, as you get to know your angel investor, check to see who’s available to you. Angel investors are often very successful business people. They possess a lifetime of real-world experience. You are going to experience the ups, downs and sideways of trying to scale the business. Having a close group of “been there/done that/bought the t-shirt” experts who are always on-call and therefore  can be invaluable. If you find you want their help more than every once in a while, you may want to consider a more formal, structured relationship (e.g. a board seat, formal advisory role, formal mentoring relationship). If this is the case, you should be one to make the suggestion. Set up a one-on-one with them, outline your expectations, as well as a way to compensate them for the additional time and effort, usually in the form of additional restricted stock or stock options. But be careful, if an angel investor says his or her initial investment is contingent upon some other consulting-type engagement, politely decline the offer–they aren’t investing for the right reasons.

Making Connections

Last, a value-added angel is a connector. Most angel investors have built a large, strong professional network and many enjoy making connections between people they like. If you have convinced them to invest in your company, you are well on your way to building a trusting relationship. Hopefully, you know to send a monthly update to investors and advisors. These updates provide a great tool to demonstrate your ability to execute, as well as your willingness to ask for help, which further builds trust. Be sure to have clear and actionable asks. Make it easy for your investors to quickly read the update, see the ask and fulfill the request right then and there.

Building a successful company requires you to form many mutually beneficial relationships. Be sure to evaluate your potential investors to see what, besides money, they are going to bring to the table to help you achieve that success.