Angel Investor

Angel investors are high net worth individuals who provide capital to startup companies in exchange for equity. They often provide mentorship and advice, in addition to risking their investment. Angel investors are usually tech entrepreneurs, venture capitalists, and other individuals in the financial markets. These investors are typically the first to invest in a startup and help founders to get their businesses off the ground.

Angel investors play an integral part in the startup ecosystem. They provide funds to young entrepreneurs and business ventures which may not otherwise be able to access capital. Angel investors bring in expertise in the form of experience and advice, as well as market knowledge that can be invaluable to a startup.

Angel investors are usually wealthy, successful entrepreneurs, venture capitalists, and other influential members of the financial markets. They bring in money in exchange for equity in a startup, which is typically a mixture of common stocks and/or preferred stocks. This dilutes the founders' equity, but provides the capital necessary for the startup to develop its product and develop a customer base. Generally, angel investors are required to invest between $25,000 and $150,000.

In exchange for their investment in a company, angel investors typically demand a board seat or observer status. This allows them to provide mentorships and advice to startup founders and keep track of the progress of their investments. Angel investors will typically invest when an entrepreneurial team has greater potential than a simple idea, when they can trust the founders and their perspectives, and when they believe the venture has a compelling prospectus.

Take the example of Joe, an angel investor who is interested in investing in the venture of a tech startup. Joe has a wealth of industry experience as a venture capitalist and has developed a vast network of influential contacts in the tech field. He has taken an interest in a tech startup wanting to build a mobile application with a backend server. After he has reviewed the company's business prospects, Joe has decided to invest $125,000 in exchange for 15% equity in the company.

In addition to the capital, Joe also provides advice and support when needed. He is available to offer insight from his vast knowledge of the tech industry and helps the team with the regulatory and legal aspects of setting up a business. Joe also helps the team with marketing, branding, and strategy. In exchange for his investment, Joe’s advice and expertise is invaluable and helps the team succeed.

In conclusion, angel investors are individuals who offer capital in exchange for equity in a startup. They provide expertise and advice, as well as market knowledge, that can be instrumental to a startup’s success. They have a large stake in the startup and are committed to helping teams secure the necessary capital for the business.