Angel Investor
A high-net-worth individual who invests personal capital in early-stage startups.
What is Angel Investor?
An angel investor is a high-net-worth individual who provides capital to early-stage startups — typically at the seed stage — in exchange for equity or convertible debt. Unlike venture capital firms, angels invest personal funds rather than pooled capital from limited partners. They often bring industry expertise, networks, and mentorship alongside funding. Under SEC rules, angels in the US must be accredited investors (income over $200,000 or net worth over $1 million). Angel investment fills the funding gap between friends-and-family rounds and institutional venture capital.
Example
Peter Thiel invested $500,000 in Facebook in 2004 as an angel investor, receiving a 10.2% stake. When Facebook IPO'd in 2012, that stake was worth over $1 billion — one of the most successful angel investments in history.