What is the origin of the term Angel Investor?
The term Angel Investor has its origin in Broadway plays.
At the beginning of the 20th century, those people who financed these works were referred as "angels".
What is a Business Angel?
Business Angel is an individual who contributes his own money in nonpublic companies whose promoters are not his family or friends. Known in the US as Angel Investor, in Europe it is often called Business Angel. Business angels typically follow the initial funding provided by the founders and their friends and family.
Angels invest for reasons beyond financial return: social responsibility and community involvement through local investments also rank high for angels.
It is often said that the money contributed by Business Angels is smart money since, often, this class of investors, in addition to offering financing, support entrepreneurs by sharing with them their contacts, their experience and their knowledge, helping the development of the companies in which they invest. With domain expertise and entrepreneurial experience, angels also make excellent advisers and mentors.
When Angel Investors invest in companies in early stages of development (seed and start-up) they contribute to fill the financing gap that currently exists in a space once occupied by venture capital entities, today more interested in projects in more advanced stages, which require a greater volume of investment and involve more moderate risks.
Angels invest for reasons beyond financial return: social responsibility and community involvement through local investments also rank high for angels.
It is often said that the money contributed by Business Angels is smart money since, often, this class of investors, in addition to offering financing, support entrepreneurs by sharing with them their contacts, their experience and their knowledge, helping the development of the companies in which they invest. With domain expertise and entrepreneurial experience, angels also make excellent advisers and mentors.
When Angel Investors invest in companies in early stages of development (seed and start-up) they contribute to fill the financing gap that currently exists in a space once occupied by venture capital entities, today more interested in projects in more advanced stages, which require a greater volume of investment and involve more moderate risks.
Why Do Business Angels Invest?
Business Angels invest to make money.
Angels Investing is not a philanthropic venture. Angels are in the business to make money. It may not be their only goal, or even the main one, but Business Angels are always motivated to invest by making a profit.
Smart Money
The best Angel Investors provide Smart Money
In addition to money, Business Angels can support entrepreneurs with their contacts, their experience and their knowledge, which is why they are said to contribute "smart money".
Seed, Startup and Early Stages
Angels provide early-stage investment. Business Angels are the most important source of funding for Early Stage companies (Seed, startup and early stages)
Why is it Important to Promote the Figure of the Business Angel?
Angel Investors are a figure for promoting Entrepreneurial activity, promoting Innovation and creating Jobs. Angel investment money plus contribution of expertise and experience amount to an essential and vital part of economic growth for local communities and nations.
Impact Investor
Impact Investing is close to many Angels. Business Angels invest into startups, with the intent to contribute to measurable positive social, economic and environmental impact alongside financial returns.