Who is an angel investor?

An angel investor is defined as a wealthy individual who provides financial support to startup companies, often in exchange for equity in the business. These investors typically have a personal interest in the startup’s success and may also offer mentorship or guidance to the entrepreneurs. Unlike venture capitalists who usually invest larger amounts of money in established companies with more extensive business plans, angel investors are more likely to take risks on early-stage businesses that may not have a proven track record.

This type of financing is crucial for many new ventures that struggle to find funding through traditional channels, such as banks, which often require established financial histories. Angel investors can fill this gap by offering not only funds but also valuable networking opportunities that can help the startup grow and succeed. The characteristics of an angel investor underline their role in fostering innovation and entrepreneurship in the economy.