What is an Angel Investor?

An Angel Investor is a high-net-worth individual who provides capital to early-stage startups in exchange for equity ownership or convertible debt. Angels typically invest their own money and often offer strategic advice and business connections.

Characteristics

• Invests at seed or early-growth stages

• Accepts higher risks in pursuit of higher returns

• May invest independently or as part of angel networks

Example

An angel investor provides $200,000 in seed capital to a fintech startup in return for a 10% equity stake and a seat on the advisory board.

Benefits

• Provides startups with flexible, founder-friendly funding

• Offers mentorship and industry connections

• Often quicker decision-making than institutional investors