Angel Investment

What is Angel Investment?

Angel investment is a form of early-stage financing provided by high-net-worth individuals, known as angel investors, in exchange for equity ownership in a startup. These investors often fund startups during the seed stage to help them develop a product, validate a business model, or reach early milestones. Angel investments can provide valuable support beyond capital, including mentorship and networking opportunities.

Characteristics of Angel Investment

• Early-Stage Funding: Typically occurs during the seed stage before the startup generates significant revenue.
• Equity-Based: Angel investors receive a stake in the company in exchange for their investment.
• Value-Added Support: Many angel investors offer mentorship, industry connections, or expertise to help the startup succeed.

Advantages and Disadvantages of Angel Investment

• Advantages: Provides early-stage capital, mentorship, and valuable industry connections.
• Disadvantages: Involves giving up a portion of equity and may lead to potential dilution in future funding rounds.

Related Terms and Concepts

Seed funding, equity financing, venture capital, startup financing.