There are roughly 265,000 active individual angel investors. If you want to go the route of tapping an angel network — a group made up of up to 150 individual investors who pool their finances and share the due diligence work — there are more than 300 of those. In short, there are lots to choose from and they’re ready to invest. The challenge is finding the right angel investor for you and your business.

What a lot of founders don’t realize is that not all angels invest for the same reasons. Backing a startup is a bit like shopping for a car: Do you want a sports car that does zero to 60 in four seconds? A dependable sedan? A Prius that appeals to your environmentally friendly side? Keep in mind that monetary gain may be a secondary reason for some investors.

Here are three of the most common types of angels and what motivates them:

• Hedonistic angel investors are attracted to what they perceive as exciting ventures, seeking the thrill that comes with risk and innovation.
• Angel investors looking for a significant ROI seek companies that have the likelihood to be bought out by a large corporation or the ultimate prize of going public.
• Altruistic angel investors are motivated by a desire to support new companies and entrepreneurs, community development, and job growth.
• Start by researching the backgrounds of individual investors to identify their motives. Once you know what they’re looking for, here are five more things you should take into account before you approach them:

1. The investor’s experience. Most angel investors are not only looking to provide their money, but their insight and guidance as well. You can bank on the fact that they will probably want to be involved with your company should they decide to fund it, and thus selecting an investor with market-specific experience makes it easier to speak the same language.

2. Geographic location. Investors in close proximity to your business are more likely to invest because it makes counsel easier. It is not a coincidence that in venture capital, most VCs are in New York, Texas, and California because they’re close to the action. Investors like to grow where they’re planted.

3. Rate of return. Does your projected rate of return meet their objectives? Does your company have the potential to pass their investment criteria? Each investor has different requirements.

4. The needs of the market. Investors always evaluate the market’s needs and consider whether your product or service will carve a niche for itself. Can you demonstrate vast growth potential, uniqueness, and an unfair competitive advantage? An investor is looking to see if you’ve done the research to show that you can make it happen.

5. Their investment portfolio. Investors have a comfort zone. Investors’ past actions guide their future decisions, so the most likely fit will be with someone who has previously invested in opportunities similar to yours. Even within the technology sector, some investors prefer to see innovative applications of existing technologies as opposed to brand-new technologies.

By Mary Goodman and Rich Russakoff, BNET – CBS Interactive Business Network

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