What is an angel investor?

Short answer

An angel investor is an individual who puts personal capital into a business, often while it is still growing and before larger institutions are involved. Angels typically look for opportunities they can understand and evaluate, so the right person depends on your company, its stage, and the investor's interests. Start by deciding which investors are most likely to understand your industry and business model. That focus helps you spend time on relevant conversations instead of presenting to everyone. Be ready to explain the business, the team, and how the proposed investment works in plain language. Treat each conversation as a chance to learn what investors need to assess the opportunity.

Checklist

Identify the company's stage, industry, and capital needs before building a prospect list.
Look for individuals who have invested at a similar stage or understand how businesses like yours operate.
Ask potential investors what kinds of businesses and opportunities they follow.
Find out what information they need to evaluate a company, its team, and its plan.
Explain unfamiliar parts of your business without assuming the investor knows your industry.
Prepare a concise company overview and consistent materials about the team and investment structure.
Focus outreach on people with a natural interest in your space and a reason to understand the opportunity.
Track questions and follow-up actions so each conversation improves your next one.
Keep the discussion factual, including the risks and uncertainties an investor should examine.

From my talks

"If you have not raised any capital and you are starting from the bottom, then it is likely you will need to raise capital from friends and family, local HNW contacts, or HNW individuals who know your space well so that you don't have to teach them the ABCs of manufacturing or the media business."

Capital Raising Book

Common scenario

A founder building a manufacturing business starts by speaking with local individuals who already know the industry. Those conversations can focus on the company and its needs instead of explaining basic manufacturing terms. The founder records which questions come up repeatedly and improves the overview before speaking with the next prospect. This is a general illustration, not a claim about a particular investor or client.

What to do next

Write down your company's stage, industry, amount sought, and planned use of funds.
Describe the investor profile most likely to understand the business, including relevant experience and interests.
Prepare a short overview of the team, business, investment structure, risks, and questions you can answer.
Make a focused list of prospects and referral paths, then record each conversation and follow-up.
Review the questions you hear and update your materials so they address real investor needs.

Work through it with the one-liner builder. See all angel investors questions.