Wikipedia defines an angel investor : “An angel investor or angel is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity”. The business angel investors are different from venture capitalists in that the former are investing their own funds.
The angel investors generally invest in startups in exchange of which they enjoy equity ownership interest. The fact that angel investment is increasing at a fast pace remains unquestionably doubtless. Normally, an angel investor would invest between $25,0000 and $100,000, and sometimes can even go higher. In fact, if you think it the other way round, the business angel investors are beneficial to the early-stage startups.
While venture capital is a little more opted process, it is also true that angel investing is gaining strong grounds with the passing of days. While it is the high-tech hubs that are targeted by the venture capitalists, the angel investors are more inclined to invest in the entrepreneurial startups. There has been a steady increase in the number of prominent business angel investors in the last decade.
Even beyond their role as angel investors, they mentor the startups. Besides offering hands-on experience, the angel investors also offer valuable advice and monetary solutions to startups. There has been a gradual but large shift in the mode of angel investors. While the lending remained limited to known people in the early times, in the present times the business angel investors lend to good early-stage startups.
Generally, the angel investors invest in startups with an intention of getting a good ROI after a period of time, which is mostly a period of ten years. In fact, angel investment is a lucrative mid-career option that has emerged years back and is evolving now.