An angel investor (also known as a private investor, seed investor or angel funder) is a high net worth individual that is considered to be an “Accredited Investors” who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. Often, angel investors are found among an entrepreneur’s family and friends. The funds that angel investors provide may be a one-time investment to help the business get off the ground or an ongoing injection to support and carry the company through its difficult early stages.
Essentially these individuals both have the finances and desire to provide funding for startups. This is welcomed by cash-hungry startups who find angel investors to be far more appealing than other, more predatory, forms of funding. For the most part, Angel investors are survey and experienced business professionals that understand the risk-reward dynamic in high-risk investments.