Writing a Business Plan mentor Rhonda Abrams responds: Angels truly are heavenly. Unlike venture capitalists who invest other people's money, angels are investing their own funds. That gives them more leeway on the kinds of things they can and will invest in. They also don't have to see such large returns as venture capitalists, so they can invest in smaller companies with smaller markets.
On the other hand, because it is their own money and there's less of it, angels are careful -- at least the smart angels. They want to see a business idea they understand and be confident the management can carry it off. And they need to know how soon the company will be able to make money or raise additional financing because the angels' own funds are limited.
What kinds of businesses get angels' halos shining?
Something they understand, ideally a business from an industry they've been associated with.
Something they're passionate about -- angels can always leave their money in the bank, so an investment has to interest them.
Management they trust, respect, and like.
Something they can bring added value to.
Deals that don't require huge sums of money -- or additional rounds of angel money.