Business Angels - wealthy individual who invest in startups

Wealthy individuals who invest in unquoted young entrepreneurial companies

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.

Types of Business Angels

Syndicates of Business Angels

Investment Criteria

Investor Return Options

Typical Terms of Preferred Stock

The Scale of Angel Investments

According to a Global Entrepreneurship Monitor's (GEM) Executive Report informal private investment in emerging and new business dwarf the more formal venture capital outlays. Informal investors funded 99,962% of all business and supplied 91.8% of the total amount invested in GEM nations. Totally, around US$400 billion was invested in over 30 million companies.

Across all GEM countries about three in every 100 adults have invested in someone else’s business during the last three years. Of those investors, 43.7% report that they invested in a close family member’s business, 8.9% in a relative’s, 29.2% in a friend or neighbor’s, 8.9% in a work colleague’s, and 9.3% in a stranger’s.

For the United States alone, business angels put dozens of billions dollars behind dozens of thousands deals every year. The population of business angels in the country grows very fast.

In the European Union, it's estimated that at least one million of potential angels represent a total investment pool of Euro about 20 billion.

In average, business angels fund 30 to 40 times more start-up ventures every year than venture capitalists.

Venture Investing

Search for Investment Opportunities

Business Plan Evaluation

Valuation of Start-up Businesses

Structuring the Deal