Angel investors are wealthy individuals who provide early capital for a startup in
exchange for preferred stock or convertible securities. Angel investment is a fairly common source of financing for young startups, as angel investors can bridge the gap between a “friends and family” seed funding and larger venture capital funding. Many angel investors have some experience in the startup community and can be a useful resource for networking and management advice in addition to a source of funding.

Last reviewed: May 3, 2021