Angel Investors
August 4th, 2008
Angel Investors
An angel investor is a wealthy individual who provides capital to an expanding small business. An angel investor typically invests his own private money, unlike collective venture capital funds. The angel invests in the startup process and has a personal stake in the company’s success. Similar to venture capital investments, angel investors are vulnerable to a high risk of failure, but if the company is successful the possible returns are equally high. Startup businesses often fail, costing angel investors large sums of money. Angel investors compensate for this by demanding a high percentage of any success. Angel investors are an important way for small businesses to gather the capital necessary for major expansion.