Early stage investing is a lot like gambling in Vegas -- A small business angel keeps placing bets in hopes that one of the bets will hit big enough to more than pay for all of the other losses that virtually every small business angel is bound to take. Investors spend a great deal of time on due diligence and hedge their bets by funding several different startup businesses at any given time. They don't just slap down money for every idea that comes across their desk. However, despite their best efforts, most of these bets fail. But, when one of their funded companies hits it big, it really hits it big!

What is a home run?

A home run for most investors is a significant return on their investment, somewhere along the lines of 10 times their original investment in four or five years. There is no absolute definition of what a home run looks like to every investor, but it's certainly not "doubling their money in ten years". You can do that with the stock market on just a modest gain. There are countless businesses that are great ideas and can be well executed, but just can't provide the potential returns that an early stage investor requires.

Is my idea a home run?

Does it have the potential to make hundreds of thousands of dollars? Or does it realistically have a chance at making tens or hundreds of millions of dollars? If your idea can return millions of dollars to an investor and you and your management team can execute on the business plan, then you might be a good candidate for early stage investment. If you have a proven business model and just need funds to quickly scale the growth, then it could be time to shop your business around to investors. They'll be the first to shoot holes in your dreams of being the next Google. And if they like your idea, you might be able to strike up a deal.