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Angel Investor

What is an Angel Investor?

Angel Investor refers to an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity. Angel investors typically fill the gap in startup financing between friends and family and venture capitalists. Although the term may imply a beneficent interest in the business, the primary goal of an angel investor is usually a high return on investment.

Angel Investor in More Detail

The involvement of an angel investor can vary from one-time financial support to an ongoing injection of money to support and carry the company through its early stages. Angel investors often contribute more than just finances; they may also offer their expertise and network, providing guidance and facilitating further opportunities for the company.

Angel investors are crucial to the growth of startups by allowing founders to scale their operations faster than they could with traditional loans or their resources. This type of investment typically carries high risk, as a significant percentage of startups fail. However, successful investments can yield high returns, often from capital gains achieved when the company goes public or is sold.

The definition of an angel investor encompasses not only the financial and operational aspects but also the personal motivations and contributions that these individuals may bring to a business venture. They are often driven by a desire to mentor and influence companies beyond just monetary contributions, setting them apart from other types of investors.

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