Angel Investors in 2025: Origins, Risks & Key Comparisons

An angel investor is a high-net-worth individual who provides capital to early-stage startups, typically in exchange for ownership equity. Unlike traditional loans, angel investments are not expected to be repaid unless the business succeeds, making them a crucial form of risk capital for entrepreneurs. These investors often seek higher returns than the stock market and are drawn to startups for reasons beyond profit, such as mentoring, industry passion, or leveraging their expertise in new ventures.

Angel investors may offer a one-time seed funding or provide ongoing financial support based on business milestones. They can be professional investors managing multiple startups or even family and friends of the founders. Their involvement is vital in helping startups bring products to market and scale in their early stages.