based on "Angel Investing", by Osnabrugge, M.V. and Robinson, R.J., 2000

1. Entrepreneur should try to personally finance and bootstrap their firms as long as possible, until the need for external growth finance becomes evident and unavoidable.

2. Entrepreneurs should carefully weigh the pros and cons of business angels before they initiate the search for, and discussions with, private investors.

3. If business angel finance is deemed appropriate, entrepreneurs should form realistic expectations of roughly how much money they need and how much equity they are willing to surrender.

4. Entrepreneurs should try to learn as much as they can about business angels and how they behave; they should decide what type of business angels they prefer in their firm and what role they want the investor to assume. For example, some young ventures in need of accounting and finance assistance often try to find a business angel with such skills to contribute, in addition to money.

5. Entrepreneurs must sharpen their business plans with the latest information, realistic financial projections, and rough potential valuations. All too often, investors see poor business plans that do not explicitly show that the entrepreneur has fully thought out possible scenarios. Realistic financial projections show the competence and care of the entrepreneur.

6. Entrepreneurs should try to find business angel investors by following any of the ten principal search methods that include: personal networks; professional networks; snowballing; formal matching services; angel alliances; venture capital clubs; electronic matching services on the Internet; matchmakers; mailing lists and publications; investee firms.

7. Finally, entrepreneurs must learn to discriminate between investor types and not just take the first offer, but rather the one most appropriate for the good of the firm. Entrepreneurs should also carry out due diligence of their own on potential investors; it certainly is a two-way street. Once a worthy investor has been found, entrepreneurs should learn how to hold their own in the negotiations stage.