An angel investor is an individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. These investors are often affluent individuals who offer their money and valuable advice, expertise, and contacts to help start-ups grow and succeed. Angel investors typically step in after the initial “seed” funding round and before venture capitalists. They play a crucial role in the early stages of a business, often when the risk of failure is high but the potential for growth is significant.
Angel investors are looking for wild cards because the best founders are typically inflexible and unmanageable, pursuing their visions at the expense of other people’s feelings.
Jason Calacanis, founder and CEO of Inside.com
In Simpler Terms
An angel investor is every start-up’s fairy godmother. They believe in your dream and have the funds and know-how to help make it a reality. Many successful companies today, like Google and Yahoo, were initially funded by angel investors. These investors often take bigger risks than banks or traditional investors, but they also get to be part of exciting new ventures and, ideally, make a profit.
