Angels are changing their focus
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As economic uncertainty ripples through global markets, angel investors are reassessing their expectations for what they look for in early-stage startups. Hype-driven pitches and lofty projections are taking a back seat to fundamentals: sustainable business models, defensible technology, and founders with a clear grasp of their business data. In a tougher funding environment, angels are prioritizing startups built not just to scale, but to survive.
Angel investors are wealthy individuals who back early-stage startups with their own capital in exchange for equity, often adding mentorship and expertise, and filling the funding gap before bank finance or venture capital in pursuit of high returns.
Figures from Business Research Insights indicate that the global angel investment market is expected to grow from approximately $31 billion in 2025 to around $34.5 billion in 2026, underscoring the strength of early-stage finance. Key to securing a slice of the funding is having a clear understanding of what angel investors are looking for, and that is changing.
Ten years ago, angel investors could afford to rely on gut feel. Charisma, vision and a rough plan often opened doors. Today’s environment is very different. With capital under closer scrutiny, stronger competition for standout deals and far greater data transparency, angels now expect founders to fully prepared.
Data over dazzle
Where founders once raised angel capital on potential alone, angels now want evidence that the founder understands the numbers, even if they are still small. Matthew Tran, founder of shoe company Birchbury, capitalized on his engineering degree to secure angel investment for his business expansion phase. The biggest change he has seen is that angels use software to screen startups before they will even talk to you.
He says: “During our raise, six out of 11 investors told us they ran our numbers through automated tools first. They wanted access to our Stripe account, our inventory data, and our customer purchase patterns. We got funded because we had solid numbers. We spent $118 to secure each customer, where each one was worth $487 over time, and 34% came back to buy again within six months.
His advice to other founders is to ensure they have well-organized data before they start pitching, enabling investors to check everything through their tools. “Show numbers that prove your business is profitable and present past wins as well as forecasted growth opportunities,” says Tran.
Making a social impact
Last year, trends for angel investment showed a strong surge toward impact investing, with early-stage investors seeking more than just financial returns: they want to make a difference. The future of angel investors is deeply intertwined with social good, driven by several key forces reshaping funding decisions. This is reflected in the high-growth sectors now attracting angel capital, which include healthtech, AI, and sustainability, a trend that is set to continue into 2026.
“Angels are much more motivated to back scalable companies that are solving real problems for society, industry and the planet,” says Fraser Lusty, managing director of Edinburgh-based angel investment syndicate Equity Gap. “Over the past five years, our members have invested heavily in areas such as clean tech, green tech, and future work, including companies like SeaWarm, which is already applying water-source heat technology in real homes, and ZOEX, the UK’s first female-founded wave energy business.”
Supply Chains Under Scrutiny
And there is a sound rationale for the focus on sustainability, as John Beaver, founder of Alternative Brewing and Desky, discovered during his quest for angel investment.
He says: “They’ve seen businesses collapse when suppliers cut ties or governments start blocking imports from factories with poor practices. Sustainability used to be just a ‘nice to have.’ Over time, angels started asking tougher, more practical questions because they’d seen businesses fail when suppliers were cut off, regulations changed, or factories were shut down due to bad work practices.”
When Beaver was raising money for Desky, investors dug deep into where the materials came from and how their factories treated workers. They demanded proof that their wood suppliers had proper certifications and that their manufacturing partners passed labor inspections.
“Many angels passed on my early pitches because I talked too much about how great our desks were and how big the market was,” says Beaver. They only agreed to invest after I proved I had factory partners who would do custom work for us and that I knew how to price products in ways our competitors missed. I showed them I had knowledge and relationships that would take anyone else a year or more to build from scratch.”
AI reshapes angel decisions
The rise of AI and data-driven methods is also influencing trends in the way angel investors make funding decisions, with technology becoming the key ingredient for making smarter, quicker, and more assured funding choices. However, founders need to be mindful of their own use of AI in funding pitches, as business advisor Anuraag Jain, who works closely with founders and investors across early-stage and scale-up contexts, explains.
He says: “Most investors are now using some sort of AI detector first to see if this interest sheet speaks AI or human. As a next step, they then question deeply and seek clarifications on the jargon being used in presentations. What I have observed is that founders who are open about using AI for preparing presentations and why they are doing that appear more trustworthy. They are not being penalized but appreciated for sensible use of new tools, including AI.”
Tech must earn its keep
AI has become widely accessible and an increasingly important component of so many business functions, but novelty for its own sake no longer convinces. What matters, says angel investor Andrei Komissarov, is integration into real workflows, access to data, and distribution or partnership moats.
“Investors expect instrumentation from day one: tracking hypotheses, funnels and unit economics, and tight burn management,” he says. “In B2B, security, compliance, and procurement readiness have moved to the early stage of the conversation. The market rewards teams that learn fast, spend carefully, and show traction with live customers, not slides.”
What angel investors want now
As an investor, Komissarov looks for three fundamental things: feasibility, real differentiation, and first customers. To be successful, founders need to show exactly who they are building for, and which pain they solve, not with words but with data: interviews, experiments, and conversions in early onboarding.
“The lesson is simple: a successful pitch is not slides, but a proven product-market fit, a win-win for the partner, and week-by-week execution discipline,” he says. “Across all sectors, angels are looking for founders who understand their market, can clearly explain their numbers, and are realistic about growth. Strong collaboration between founders and angel investors remains critical, and the best pitches are those that build confidence in both the commercial opportunity and the long-term working relationship.”
ENDS
