Question
Reading up on it, I know VCs are not keen on investing in service businesses. But, angel investors are more likely to invest in a service business startup. So I'm curious, what type of exit strategy do angel investors prefer?
In an ideal world, I would like to keep the business (not sell it) and keep it as a private corporation, no public shareholders to answer to. That's the goal, but might change . Thanks.
Answer
Angel investors have two concerns: a) how long before they get their money back and b) what is their rate of return.
You can address this by structuring their investment as a convertible note, preferred stock or via dividend payouts. In all cases you keep control of the company.
Having said this, the most important issue is that the company will be profitable.
