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Angel Investor

An angel investor is an individual who invests their own money in early-stage startups in exchange for equity. Angels typically write $10k-$100k checks and invest before VCs enter.

What is an Angel Investor? How to Find Angels

Angels vs. VCs: Angel investors are individuals using personal wealth. VCs manage funds from limited partners (LPs). Angels invest smaller amounts earlier. VCs invest larger amounts later. Angels can move fast (days). VCs need partnership approval (weeks). Why angels matter: They fill the gap between friends-and-family funding and institutional VC. Most startups can't raise a $2M seed round on day one—they need $100k-$500k first to build, launch, and prove traction. Angels provide that. What angels look for: (1) Strong team—can they execute?, (2) Big market—is there room to grow?, (3) Early traction—users, revenue, or rapid growth?, (4) Personal connection—do they understand the problem or industry? Angels invest in people and ideas they believe in, not just spreadsheets. Angel deal terms: Angels typically invest via SAFE (Simple Agreement for Future Equity) or convertible note. They get equity later when you raise a priced round. Typical angel valuation: $2M-$5M cap. Expect to give up 5-15% for your first angel round. Super angels: Angels who invest frequently and write larger checks ($50k-$500k). Examples: Jason Calacanis, Elad Gil, Sahil Lavingia. They often have portfolio companies they actively help with intros, advice, and follow-on funding. Angel syndicates: Groups of angels pooling money to invest together. AngelList Syndicates let one lead angel make the decision, others follow. Startups get $200k-$1M from 20-50 angels in one close instead of pitching each individually. Finding angels: (1) Warm intros from other founders, (2) AngelList, (3) Twitter—angels with 'investor' in bio, (4) Demo days (YC, Techstars), (5) Industry events and accelerators.

Examples

Naval Ravikant (AngelList founder) angel-invested in Uber, Twitter, Postmates. Peter Thiel angel-invested $500k in Facebook for 10.2% (worth billions). Most angels don't hit that—but early bets pay off.
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Related Terms

Bootstrapping

Bootstrapping means building your company with personal savings, revenue from customers, or small loans—without taking venture capital. You own 100% and answer to customers, not investors.

Pre-Seed

Pre-seed is the earliest funding round before seed, typically $50k-$500k. Founders raise from angels, friends, family, or micro VCs to build an MVP and validate the idea before raising institutional seed.

SAFE (Simple Agreement for Future Equity)

A SAFE (Simple Agreement for Future Equity) is a financing instrument, introduced by Y Combinator in 2013, that lets an investor give a startup cash now in exchange for the right to receive equity later, when the company raises a priced round. It isn't debt: there's no interest rate and no maturity date.

Seed Stage

Seed stage describes a company that has raised, or is raising, its first institutional round. The product usually exists and has early users, and the money is there to find repeatable go-to-market rather than to discover the idea.

Series A

Series A is typically the first institutional VC round after seed funding. Startups raise $2M-$15M to scale a proven business model. You need strong traction—revenue, users, growth—to raise a Series A.

A/B Testing

A/B testing (split testing) means showing two versions of something to different users and measuring which performs better. Version A vs. Version B. Data wins, opinions lose.

View all terms