what is an angel investor

An angel investor is a wealthy individual who invests in business ventures and provides capital for startups that need quick funding. They typically invest in early funding rounds, including seed and Series A rounds, and are often accredited investors. Angel investors may be involved in a series of funding rounds, and they search for startups with intriguing ideas and invest their own money to help develop them further. Angel investors are also known as informal investors, angel funders, private investors, seed investors, or business angels. They can bring guidance, networking, and knowledge to the startup company in addition to their capital investment. Angel investors often come from the business world, but that’s not their only point of origin. They are commonly found in professions such as lawyers, doctors, accountants, and financial advisors, among others. C-level company executives who have risen through the ranks and know what it takes to run a successful business are also common angel investors. Angel investors prefer to get involved in the early stage of a company, at the “seed” or “angel” funding phase, which could mean investing when the company exists only as an idea or when a business is already up and running. Angel investors often syndicate together, allowing them to participate in larger deals with smaller investment amounts and limiting their portfolio exposure. Investments tend to be structured as either convertible debt or equity, depending on the preferences of the investor and company. Angel investors often bring strategic industry knowledge to the company, taking an active role as a director or advisory board member.