How angel deals actually work
Understanding angel investing conceptually is one thing; closing an actual deal is another. This is the mechanics layer — the paperwork, structures and numbers behind every angel check.
Seven guides, start anywhere
SPVs & syndicates
How groups of angels pool capital into a single deal, and the fees involved.
Term sheets
The clauses that matter most — valuation, liquidation preference, pro-rata, and what is actually negotiable.
Cap tables
How to read one, what fully diluted means, and what to check before you invest.
Due diligence
A practical checklist: team, market, traction, legal structure, cap table, terms.
Pre- vs. post-money valuation
The one-word difference that changes your ownership percentage.
Pitch red flags
Warning signs in the numbers, the team and the market story.
Business & revenue models
Marketplace vs. platform vs. aggregator, and subscription vs. freemium vs. take-rate — two separate questions.
Frequently asked questions
What order should I read these in?
Do these apply to deals outside Latin America too?
Where can I read about angel investing conceptually, not just the mechanics?
How these pieces fit together
The order they actually matter in
A first-time angel usually meets these concepts in the order a founder presents them, which is the wrong order. Valuation is discussed first and matters least at the moment of investing, because a seed price is a negotiation rather than a measurement. What determines your outcome is further down the list: the liquidation preference stack that sits above you, whether you hold pro rata rights, and how much dilution stands between this round and an exit. Read those three before arguing about the pre-money.
Terms are a package, not a menu
Every term interacts with the others. A high valuation with a participating preference and a large pre-money option pool can leave a founder and an early angel worse off than a lower valuation on clean terms. This is why comparing two deals on headline valuation alone is meaningless: the same number can describe two economically different investments. Ask for the full term sheet and read the parts nobody highlights.
What you can and cannot negotiate as a small cheque
An angel writing a small cheque into a priced round is usually taking the terms the lead negotiated. That is not a reason to skip reading them — it is the reason to read them, because your only real decision is whether to accept the package as it stands. Where a small investor does have leverage is in structure: whether you invest directly or through an SPV, whether you have information rights, and whether you commit to follow on.