What is an Angel Investor?

Business Angel investing has increased in the last few years, with more startups relying on this method of funding.  But what exactly is an angel investor?  

Startups defines an angel as “affluent and wealthy individuals who invest their personal capital in start-up companies (that are typically early-stage) in return for an equity stake.” 

So what should an angel investor look for in a startup?  Luke Johnson, writing in the FT, will only invest if certain criteria are met.  He looks for teams (rather than individuals) that are committed (financially and with their time), have a deep understanding of their business and industry, with deep enough margins to deliver value.

Angel investors will have different personal preferences on what sort of startup to back, but ensuring that basic criteria are fulfilled will help ensure your investments stays as sound as possible.