Angel Investor
A wealthy individual who invests personal funds in startups at the earliest stages.
Definition
An angel investor is a high-net-worth individual who provides capital to startups, usually at the pre-seed or seed stage, in exchange for equity or convertible instruments like SAFEs. Angels typically invest $25K-$500K per deal and often bring industry expertise and connections. They invest their own money, unlike VCs who invest a fund's money.
Why it matters
Angel investors are often the first outside capital in a company. Their involvement can validate the business and lead to larger rounds. If your company was angel-funded, those early investors may have board influence or information rights.
Example
Three angel investors each invest $100K via SAFEs with a $6M valuation cap. When the company raises a $3M seed round at a $12M valuation, each angel's SAFE converts and they effectively bought in at half the price.