What is a Business Angel

What is a Business Angel?

Each year billions of dollars of investment around the world supports fledgling companies introducing their inventions to the market. Angel investment as a category exceeds the seed and early-stage venture capital contribution. It is the primary source of external seed and early-stage equity financing in many countries. There are angle groups and associations in most countries.

Business angels invest their own money, strategic and operational expertise and personal networks into new ventures. They are not investing “other people’s money”. The leaps in technology, particularly over the last decade, have allowed for smaller capital start-up requirements which, in turn, has allowed the business angel sector to grow.

The notion of angel investment has been around no doubt for centuries, but the sector is becoming far more sophisticated with the growing number of angel groups and angle networks. They exist in many regions and many industries. Business angels are high net worth individuals, usually with business experience, who are classified as sophisticated investors. Each country has its’ own way of these investors registering themselves. They tend to invest in a portfolio of companies to spread the risk. For each investment they usually provide somewhere between $25,000 to $500,000 depending on the capital intensity of the industry, the size of their group and the nature of the idea. They either invest as individuals or as an angel group depending on their wealth and the size of the investment required. They play such an important role in economic growth, technology leaps and the success of what otherwise is just an invention

Leave a Reply