Definition

Business angels

Business angels are individuals who invest their personal capital directly in start-ups. The term angel was first used in connection with finance to describe wealthy New Yorkers who invested in Broadway plays. The prototypical business angel, who invests in entrepreneurial start-ups, is about 50 years old, has high income and wealth, is well educated, has succeeded as an entrepreneur, and invests in companies that are in the region where he or she lives. These investors generally invest in a single company and are looking for companies that have the potential to grow 30 to 40 percent per year before they are acquired or go public.

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