UK Accounting Glossary
In the financial world, the term angel is short for an angel investor. An angel is an affluent individual who invests his/her personal capital into a business endeavour (usually a start-up) in exchange for equity ownership. Frequently, an angel is a former or current entrepreneur who has become wealthy through the sale of a business. An angel does not manage a fund or pool the resources of a large group of investors. Since an angel is investing “pocket” money, he/she takes a vested and personal interest in the success of the venture. An angel investment is characterized by high levels of risk and the potential for failure, yet the rewards can be high. An angel has the opportunity to earn a large return on investment. Unlike a business partner, an angel is rarely involved in the day-to-day operations of a portfolio company. An angel typically brings to a company substantial expertise and a pool of valuable contacts.
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This glossary post was last updated: 4th February 2020.