How do you attract a private investor? What should you research and what questions should you consider before choosing who to bring into your company? On Monday this week, we had lunch with the serial entrepreneurs and business angels Jane Walerud and Martin Wattin who talked about private investing with our entrepreneurs.

So, simply put: A business angel is someone who privately invests in early-stage companies, with money straight from their own pocket. Jane and Martin are members of the STING Business Angels (SBA) network, and the two have invested in close to 20 startups combined.

Jane is currently CEO at her latest startup, Teclo Networks. She is an experienced tech entrepreneur and her journey goes back to 1998. Since then, she has built a portfolio of investments and companies that is rather impressive. Some of the more known cases are Bluetail, Klarna and LensWay.

Martin hails from a background as an IT-entrepreneur and investor, and has since 2006 invested in a number of IT/media companies in Sweden, the US and India. Some of the Swedish investments include Mostphotos, Rabble and Scrive, where Martin also serves as a board member.

Here is a summary from the lunch meetup.

Enjoy building companies
To invest in early-stage startups equals a large risk, and the investor can potentially end up empty-handed. According to both Martin and Jane, it’s worth taking that risk. They believe it is important, and a real pleasure, to share their expertise as serial entrepreneurs, and help companies to scale early. Angel investors usually have a deep passion for building companies, and have a lot to offer younger entrepreneurs – especially in the initial stages of a business.

“I know I’m most helpful in the early stages of a startup, before the team grows bigger than 50-60 people,” Jane said.

Martin is an active investor, and on a weekly basis he meets up with the companies as well as has regular follow-ups. “I want to steer them away from doing the same mistakes I once did, and be close to my companies,” Martin said.

Martin and Jane pinpointed business angels’ critical role in the eco system of startups, which is to support the companies with both funding and coaching when they might require expertise the most, and before they attract capital from larger VC firms.

Study before the official test
So how do you go about attracting a private investor? Well, there’s no straight answer to that.

“It’s vital to know who you’re approaching. What type of business has this person invested in earlier? Why is your company relevant to them?” Jane advised. She really emphasized the importance to identify the weaknesses within the team, and look for an investor who represents those skills.

“Make sure that you accept the right people into the company, who share your values and future ambition,” Martin urged.

For Martin, it is essential that the entrepreneur presents an idea of a vision of the business, and in what direction the business will head in the next few years. You need to have a vision to become a leader. Structure is key, and also to show a sense of urgency combined with a lot of optimism.

 “You need to find the perfect match”
At the end of the day, it’s all about how you connect. Martin and Jane could not stress enough how central the connection is between the two parties.

“You need to find the perfect match. A business angel is a key player, it has to be a brilliant fit,” said Jane.

It is worth to keep in mind that this person will be with you for a long time ahead. And, of course, by targeting the right kind of investor, identify exactly what you want to get out of it and what skill-gap the investor could fill, there’s a greater chance of finding that perfect match.

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Thanks Jane and Martin for spending this Monday lunch hour with us!

Want to hear more from two experienced entrepreneurs? Read our blogposts about Niklas Adalberth, founder of Klarna, and Henrik Lenberg, former VP Soundcloud.