Business angel (angel investor)
What is it?
A business angel — also known as an angel investor — is someone who puts their own money and experience into early-stage startups with big potential, in exchange for equity in the company. These investors often come in at the very beginning, offering not just funding, but also guidance and strategic advice to help the business grow.
Business angels play a key role in the startup world, especially when a company is just getting started and funding is hard to come by. Since they’re taking on a lot of risk, they tend to get very involved — acting as strategic partners who help founders navigate challenges and grow their business in those crucial early stages.
Here’s what sets business angels apart:
- They invest their own money: Usually in smaller amounts than venture capital funds, but it’s personal and flexible.
- They’re hands-on: Along with the money, they bring valuable experience, market knowledge, and strong networks.
- They spread out their risk: It’s common for angels to invest in several startups to balance things out.
- They invest with purpose: Many choose startups in industries they know well or feel passionate about.
Key aspects to consider
The relationship between a business angel and a startup is often super valuable. It’s not just about financial return — angels are usually excited to back innovative, high-impact projects. And while the risk is high, the potential payoff can be huge if the startup takes off or gets acquired.
In recent years, angel investors have gained a lot of visibility, thanks to the startup boom and the increasing maturity of early-stage investment markets. They’ve become key players in areas like tech, biotech, and renewable energy — helping drive innovation and economic growth.