Who qualifies as an 'angel investor'?

An angel investor is defined as an individual who provides financial backing for startups, typically in exchange for equity or convertible debt. These investors often use their personal funds to help entrepreneurs who may lack access to traditional forms of financing, such as bank loans or venture capital. Angel investors not only supply capital but may also bring valuable expertise, mentorship, and network connections that can guide startups toward success.

This role is critical in the early stages of a business, as many startups require funding to cover initial operational costs, product development, and marketing before they can generate revenue. By investing their own money, angel investors take on significant risk, which is typically offset by the potential for high returns on their investment if the startup succeeds.