Brian Cohen is an experienced angel investor and the chairman of the New York Angels. a consortium of angel investors that focus on start-ups in the New York City area. He has written, with John Kador, a book called What Every Angel Investor Wants You to Know .

Although the publication date is mid-April, I received an advanced copy and found it full of information that entrepreneurs will find useful. To start, here are five things you really ought to know about angel investors if you’re thinking of approaching them.

1. They dont make money—but like to make a difference.

Perhaps the most surprising thing you can learn about angels is that they typically don’t make money from their investments. As Cohen says:

Even the smartest angels I know feel lucky if they are net-zero after a few years. The reality is that most start-ups fail, and despite what angels may believe about their ability to distinguish the winners from the losers, most angels, including me, arent that smart.

Cohen isn’t the only one who says the risk of early stage investment is high. Fred Wilson of VC firm Union Square Ventures says that one-third of early stage investments are hits. meaning they return five times the investment or more. The other two-thirds either make a little money or, in half the outcomes, either slog it out for years or run out of cash and cannot support themselves.

The lesson is that angels are optimistic and often disappointed. The less experienced the angel, the greater the chance of disappointment and even bitterness. When you talk to angels, be clear on the risks and make sure they understand all the obstacles. It’s the only fair way to proceed, and the reputation you build today will follow you in future endeavors.

Also, angels are in the game for something other than money. Maybe it’s a chance to give back, help shape the future, or even see the future from close up. When you work with angels, you need to understand that they may be looking for something other than straight financial return, so know when you might be able to help them satisfy their itch.

2. The angel sweet spot is $150,000 to $1.5 million.

David S. Rose, founder of the New York Angels, broke out where entrepreneurs typically look for given amounts of money:

• Up to $25,000, the choice is usually self-funding. If you don’t have that much money in, many others will be uneasy about taking part.
• From $25,000 to $150,000, you’re looking at friends and family, offering either common stock or convertible notes.
• The angel sweet spot is between $150,000 and $1.5 million, more often raised from a number of individuals but sometimes from a single generous and well-off person. Why particularly well-off? Go back to how often these investments fall flat.
• In the $1.5 million to $10 million range, you’re in early-stage venture capital in at least two phases, with half of the money up front and the rest paid in phases. More than this, and it’s a late-stage venture fund.

In other words, working with angels may make sense at a particular early stage of business growth. Going to them too early or too late will minimize your chances of getting interest.

3. There are unscrupulous angels. Avoid them at all costs.

Some angels are focused only on what they can get out of you. As Cohen writes, Investors who ask you for a job are thinking only of themselves. There are brokers who want fees for introducing you to investors. Some angels use their position as investors to try and prove how much smarter they are than you could ever be, criticizing every decision you make. Avoid all these types. Starting a business is tough enough as it is.

4. Show, don’t tell.

Angels expect you to have done some due diligence and research when it comes to them—at least finding basic information about their background, why they invest, what they’re looking for, their previous investments, and value they can add beyond cash. Many angels have websites and some blog. You want to demonstrate to an angel that you put time, thought, and energy into your activities. Here’s Cohen on being pitched by someone who hasn’t looked for information on him:

Let me be blunt here. If founders haven’t done this basic homework before calling me, I have to believe they will be just as lazy when it comes to calling prospects or customers.

This is a perfect example of what you need to do in marketing and many forms of communication: show, don’t tell. If you talk about your ability in sales and marketing but don’t take the basic steps in approaching the angel investor, you’re indicating that you might be more talk than action.

5. It’s always personal.

VCs run funds usually filled with other people’s money. Angels write checks out of their own accounts. They want to connect with entrepreneurs and their businesses, but also with people. Be authentic, not some PR story you’ve already concocted.