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An individual who contributes money to startups or early-stage companies in exchange for stock ownership or debt securities is known as an "angel investor." High-net-worth individuals who invest their own money in start-up businesses are known as angel investors. They are essential to the funding of businesses in the early stages and offer the entrepreneurs they fund not just funding but also help and mentorship.
Typical investments made by angel investors span a variety of sectors, including technology, healthcare, consumer products, and real estate. They frequently gravitate toward businesses with strong growth prospects and the possibility for substantial returns on investment. Before startups have received investment from venture capital firms or gone public, angel investors frequently invest in them at an early stage.
Aside from money, angel investors frequently offer other services. Using their knowledge and experience to assist businesses in navigating the difficulties of early-stage growth, they can also offer advice and mentorship to business owners. Offering tactical and strategic counsel, assisting in the development of a network of contacts, and connecting startups with prospective clients and collaborators are a few examples of what this can include.
Angel investors often acquire equity ownership in the firms they invest in as compensation for their investment. This indicates that they have a stake in the company's success and are eligible for a share of the earnings if the company is profitable. Additionally, financial securities that indicate a claim on the startup's future earnings, such as bonds or promissory notes, may be given to angel investors.
