What Every Angel Investor Wants You to Know by Brian S. Cohen and John Kador Summary

What Every Angel Investor Wants You to Know by Brian S. Cohen provides entrepreneurs with actionable strategies to secure early-stage funding. It reveals how to align with investors’ priorities, such as demonstrating market viability, crafting authentic pitches, and planning exit strategies before launch. Cohen, the first investor in Pinterest, emphasizes due diligence, team trust-building, and customer-centric validation as non-negotiable pillars for startup success.

This book targets first-time founders seeking angel funding, early-stage investors refining their evaluation criteria, and professionals navigating startup ecosystems. It’s particularly valuable for entrepreneurs needing guidance on investor psychology, pitch framing, and avoiding common fundraising mistakes.

Yes – the book condenses 30+ years of angel investing insights into practical frameworks. It balances war stories (like Cohen’s Pinterest investment) with tactical checklists for validating market fit and negotiating term sheets. Critics praise its focus on “do diligence” over theoretical advice, making it a manual for actionable fundraising.

Cohen defines “smart funding” as securing capital from angels who offer industry expertise, networks, and mentorship beyond cash. It involves targeting investors aligned with your startup’s values and demonstrating traction through customer validation. The book warns against prioritizing money over strategic partnerships.

Cohen highlights four traits: authenticity (“save spinning for the gym”), customer obsession (“live inside their heads”), scalable vision, and preparedness for due diligence. Investors prioritize founders who articulate risks upfront and show adaptability.

The book insists founders outline exit strategies pre-launch, whether through acquisitions or IPOs. Cohen argues this demonstrates market awareness and aligns investor-founder incentives. Practical examples show how early exit planning avoids later equity conflicts.

Cohen reframes due diligence as “do diligence” – founders must proactively verify their market assumptions, financial projections, and team capabilities. The book provides checklists for stress-testing unit economics and validating intellectual property claims.

Common errors include overhyping projections, underestimating competitors, and lacking clear differentiators. Cohen advises founders to replace jargon with customer stories, use data-driven slides, and rehearse answers to 17 standard investor questions.

The book mandates “living inside the customer’s head” – proving demand through pre-orders, beta tests, or usage metrics. Cohen shares case studies where early customer obsession attracted follow-on funding.

Unlike generic advice books, Cohen’s guide focuses exclusively on angel-stage dynamics rather than VC negotiations. It’s often paired with Venture Deals for comprehensive coverage but stands out for its psychological tactics to win investor trust.

Some reviewers note the 2013 examples feel dated in today’s crowdfunding/Web3 landscape. However, core principles about investor relationships remain relevant. The book could expand on SAFE notes and equity-free funding alternatives.

While tech-heavy, the book’s emphasis on traction metrics, team diversity, and market-sizing applies universally. Cohen advises service-based startups to highlight recurring revenue models and niche dominance.

Despite market shifts, human-centric fundraising principles endure. The book’s focus on authenticity, preparation, and strategic alignment addresses timeless pain points for early-stage founders. Updated case studies could enhance its appeal to AI/web3 entrepreneurs.