You’ve come up with a world-changing idea, or at least an industry-changing idea. You have a business plan. Maybe you’ve even written some code or built a prototype. Now all you need is those few thousand bucks–or a few tens or hundreds of thousands of bucks–to get your new venture up and running. All that stands between you and your startup, in other words, is an angel.
Typically among the earliest sources of funding for would-be entrepreneurs, angels are individual investors who provide fledgling companies with seed capital–anywhere from a few thousand dollars to as much as $1 million. Angels play a critical role by investing in companies that venture capitalists consider too unproven and risky. In fact, during 2004 only 3,000 new firms were funded by VCs, while an estimated 48,000 businesses received startup capital from people who identify themselves as angel investors.