Who Are the Business Angels?

Business angels are private investors also called informal investors who invest in unquoted young entrepreneurial companies. These wealthy individuals are usually former entrepreneurs or executives. They provide not only finance but experience and business skills.

Business angels are active, in one way or another, in every country worldwide. This type of investor is called a business angel because many perceive that they save struggling firms with both finance and know-how when no one else will. Though angel investing has both its advantages and disadvantages, it is widely agreed that the advantages of business angels generally outweigh their disadvantages, making an active informal venture capital market a prerequisite for a vigorous enterprise economy.

The Scale of Angel Investments in Young Firms

According to the Global Entrepreneurship Monitor's (GEM) "2000 Executive Report" informal private investment in emerging and new business dwarf the more formal venture capital outlays. For the United States alone, in 2000 the business angels put an estimated US$ 40 billion behind 50,000 deals. Since 1997, the population of business angels in the country has grown by 63% to 400,000. In the European Union, it's estimated that at least one million of potential angels represent a total investment pool of Euro 10-20 billion. In average, business angels fund 30 to 40 times more start-up ventures every year than venture capitalists.

About Angel Investing

Venture Financing Chain (slide show)

Angel Investing (slide show)

Types of Business Angels

Typical Terms of Preferred Stock

Structuring the Deal

Tips for Entrepreneurs

Step-by-Step Guide to Venture Financing

Pros and Cons of Angel Investing

Search for Angel Investors

How to Reach Business Angels

Check out Potential Investors

Investment Opportunity Selection by Investors

Business Plan Evaluation by Investors

Tips for Business Angels

Venture Investing e-Coach

MBS e-Course: Venture Investing

Search for Investment Opportunities

Due Diligence

Valuation of Start-up Businesses

Syndicates of Business Angels