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November 29, 2019

What is an Angel Investor?

If you’re familiar with the crowdfunding space, you have likely heard the term “angel investor” before. But what exactly is an angel investor? 


Last week we broke down why anyone can invest in startups. In doing so we outlined the differences between accredited and unaccredited investors. As you might recall, an accredited investor is someone who meets one or more special requirements, having a net worth exceeding $1M or annual income over $200k for the past two years, for example. 


Angel investors typically fall into this category, however, it is not a requirement. In fact, the phrase, similar to the word “startup,” is used pretty broadly. An angel investor is, generally speaking, someone who invests in a company at a very early stage with their own money in exchange for equity. This can even include family and friends. For serial angel investors, these deals are risky, and only typically comprise of about 10% of their investment portfolio. 


Angel investors are generally investing in the founder, rather than the business itself. In this sense, they tend to be viewed as “the opposite of venture capitalists” and instead help the companies “take their first steps.”


Even if you don’t meet the requirements to be considered an accredited investor, you too can act as an angel investor for startups you believe in. Accredited or not, KingsCrowd is here to help you make the best decisions with your money.

About: Olivia strobl

Olivia is a graduate of Wellesley College with a Bachelor's in Neuroscience and English. She has spent time as an investment intern at Glasswing Ventures, an AI-focused VC fund in Boston where she helped develop machine learning algorithms for identifying early signal success factors of startups.

View Olivia strobl's articles

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