angel investor

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Angel Investor

A high net worth individual who provides financing to a start-up, either in exchange for convertible debt or equity. Among start-ups, they are thought of as a bridge between loans from family and friends and venture capital, though angel investors are themselves often personally connected to the business. Angel investors take on a great deal of risk when they invest in these start-ups; they are also subject to dilution at the start-up's IPO. Therefore, they usually require a high rate of return in exchange for their financing. They are informally known as angels or informal investors.

angel investor

A wealthy investor who provides capital for new business ventures.
References in periodicals archive ?
Harrison, 1996a, "Why Business Angels Say No: A Case Study of Opportunities Rejected by An Informal Investor Syndicate", International Small Business Journal, 14, 35-51.
Bygrave and Quill (2007) estimated that in 2006 there were 208 million active informal investors in the 42 countries and that they invested USD $600 billions (1.
But while the availability of venture capital in Wales is important in encouraging the development of high growth businesses, policy-makers also need to be aware of the crucial nature of the start-up capital provided by entrepreneurs themselves and informal investors.
In other places, informal investors finance up to 20 times the number of small businesses as do institutional venture capitalists, however such informal investment is still a rarity in this country," he says.
Together with other informal investors he founded Business Angels Technostarters BV (http://www.
Informal investors such as business angels are also a possible source of such finance, although it is becoming clear that the entrepreneur seeking such finance must have the knowledge and ability to identify a feasible development project and produce a supporting business plan to realise it.
LINC Scotland brings the "angels" in the shape of informal investors into contact with new and developing companies in need of funding.
AMSTERDAM -- On April 14, 2011, IIP closed a round of funding with informal investors to fuel growth and create extra capacity within the FUGA (www.
Policymakers, educators, and researchers must pay more attention to informal investors and less to venture capitalists.
The research also showed that the average amount of funds required by a new business was around pounds 28,550, with the entrepreneur providing around pounds 18,000 of that and informal investors providing the difference.
More than $100,000 of this financing was from outside equity investors such as venture capitalists and other informal investors.

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