Are Angels likely to invest in me as a startup for working capital?

welcome to this site. :-) I'm new here too, as you can see.

Your asking multiple questions in one post, and you don't have much specific information to us -- that makes it hard to answer you really well.

I have three excellent internet based applications that I am designing and developing in my own free time.

I would strongly advise you to do some market research, look at the potential, look at what energizes you, and cut it down to one.

working capital?

Hmn, working capital can have several meanings. I would call what you refer to a "seed investment" or "angel investment".

My wage is typical of a software developer, I'm prepared to take a pay cut

I somewhat brashly take the above to mean you'd consider going for 75% of a cushy software developer salary. That may or may not be what you meant. But if that's the case, the expect to get a quite lukewarm reception from angels -- that doesn't seem "entrepreneurial" and "driven by deep passion".

Could someone please explain the etiquette for asking investors for working capital

1. Know the investors profile before approaching him, i.e. do not take a €50k software deal to an investor who specializes in million+ biotech deals.
2. Get a referral from a trusted member of the angels network, if possible.
3. Have a well-prepared pitch. (There is more to it than that of course.)
4. Listen intensely.

and what they would typically expect in return?

Ownership. How much -- well, that depends on a lot of factors and has quite a lot of variance.

would the investors be more likely in increasing development effort at a cost to reduce the time to market

Depends on the idea, and the investors psyche. In general, if there is a need to 'catch' a disruptive technology trend in the market, or if there is a unique opportunity to claim dominance of a new market segment, then burning money for more speed should be preferred. If it's more a case of "we need to figure out the exact product / market fit now", then a low cash burn should be preferred. And a low cash burn should always be preferred by default, unless someone has a very convincing argument against it.

Update: Justyn has some very good points too. One thing that I forgot to highlight is that the valuation will increase dramatically as you go from Powerpoint-ware --> prototype --> happy, paying customers.

As an angel investor myself, here's my initial reaction:

1. Ideas are valueless. Execution is everything. You can't execute three companies at the same time.
2. What are the reasons to believe any of the projects will succeed if "3 experienced developers" were put on them? If you don't have at least a prototype with some alpha testers, that risk is probably not worthwhile.
3. Why do you need three developers per project? Almost all startups have fewer than that, so this is a red flag that either the projects are too complex or that you're not estimating the work well.
4. Angels typically expect you to take subsistence salary, nothing more, and ideally not even that for a while. The fact that you're "willing to give up" some salary is, as others have mentioned, again a sign that you might not realize how much you're expected to give up.
5. "Three ideas" shows lack of focus.

Of course do not be discouraged by any of this!

Because:

1. Maybe you just need to tune your pitch(es).
2. Maybe you don't need Angel money, or you need it later.
3. Maybe you can kick ass without pesky Angels!
4. Maybe if you picked just one project you would have enough time to implement it yourself.
5. Maybe you need a co-founder also willing to work for free, thus no Angel money.

It's a tough question, but without knowing much about you or what you're working on, I would pose the following to consider;

1) If you're looking for more than just a small amount of cash, serious investors are going to expect you to be working on the project full time already. The thinking is, if you aren't willing to take the leap and work on it full time, why should they put up the money? We all know that's not real life, we have bills to pay, etc. - but smart founders are finding ways to get a product built on a shoe-string.

2) It doesn't take a lot of cash to start a software business right now. You'd probably be better served (and give up less equity) if you get further along first. If you need more help, get some talented developers to work with you part time for an equity stake. You're better served using venture cash for client acquisition and product iteration than paying some developers to build an unproven product.

3) Do everything you can to get it built and in the hands of a few customers before taking on investment money. You'll get a better deal if you can show some traction, and you'll be able to spend the money on growing the business, not building v1 of the product.

All in all, investors are spending a lot less money on the idea stage, and more on something that's built and somewhat proven, even if only on a small scale. Late nights and creative ways to finish development may be your best bet.

A lot of people will say jump in, if you don't take the leap you'll never succeed big. That's a fine approach, but you'll be hard pressed to find an investor to fund your living expenses while you're building v1.

Justyn

Rob, bit late to the game on this one but Jason and Jesper have pretty much covered the bases here in terms of an angel/VC interest.

I just wanted to add, you would need to have something together to prove the idea ... as Jason said, Ideas are cheap.

I would

1. Pick one, put the others aside. Cut the feature set to the minimum.
2. Do the designs, screens, breif descirptions of the functions. etc.
3. At this point you can try and get someone minorly interested. Try for "this is the plan" I need $5000 or $20,000 to make it happen. If no one bites then ...
4. Spend weekends and nights developing it as far as possible.
5. Go back to the people you presented to and show them again, try some new ones.
6. However possible get a user base together and refine the concept. If you can earn money at this point good, but the market base is far more important.
7. Go back out and knock on doors once more, this is the point you are likely to get serious interest ... you will need money to scale the features, money to scale the services, people to do markeing/sales/good website etc... they will most likely help you here.

If you can prove you can make it this far people will listen and be far more interested.