Angel investors are wealthy private individuals who invest their own money into early-stage businesses in exchange for equity (ownership stake) in the company. They are also known as business angels, seed investors, or informal investors.
Unlike banks or traditional lenders, angel investors bet on the entrepreneur, not just the business. They typically offer much friendlier terms because they understand the risks of early-stage ventures. Many angels also bring valuable mentorship, industry connections, and strategic advice — not just money.
For example, Peter Thiel invested $500,000 in Facebook back in 2004 as an angel investor. That early bet turned into over $1 billion. Angel investing is high-risk, high-reward — most startups fail, but the ones that succeed can deliver extraordinary returns.