Business angel - What is a business angel?
A business angel is an independent individual who provides capital for the development of a business.
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Typically wealthy individuals, business angels (or angel investors) aim to help entrepreneurial individuals succeed with a business idea by investing their own money.
The influx of capital can help an idea develop into a viable company and provide the base to begin producing the product or service proposed.
This private investor not only provides money but is also generally interested in becoming involved in the project by acting as a guide or mentor.
They invest their time as well as provide connections to their larger network in order to help guide the entrepreneur in their new business venture.
Angel investors are easily distinguishable from other types of investors, such as venture capitalists, through several factors:
They invest their own money into the project, typically less than would be invested by a venture capitalist
They make their own decisions concerning investments
They invest according to the viability of the project, with expectations of future gains
Their main objective is to receive a return on their investment
There are different types of business angels which each have a different relationship to your business. They can be affiliated; which can include suppliers, customers or even competitors. They can also be nonaffiliated; which means they’re individuals without a previous connection to your company.
Business angels can be an excellent way for a new company to gain ground quickly and step into a new stage of growth. By providing capital and guidance, the investment can have a substantial impact on the business.
Angel investors essentially provide a bridge between a fledgling business concept and a company that’s developed enough to receive funds from a venture capitalist.
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