Debitoor Dictionary

Accounting terms explained in a simple way

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Business angel - What is a business angel?

A business angel is an independent individual who provides capital for the development of a business

Staying on top of your finances is an important part of attracting investors. Make sure yours are in order with Debitoor.

Typically wealthy individuals, business angels (or angel investors) aim to help entrepreneurial individuals succeed with a business idea by investing their own money.

The influx of capital can help an idea develop into a viable company and provide the base to begin producing the product or service proposed.

This private investor not only provides money, but also generally is interested in becoming involved in the project by acting as a guide or mentor.

They invest their time as well as provide connections to their larger network in order to help guide the entrepreneur in the new business venture.

A business angel invests personal resources into projects they believe are financially viable

What defines a business angel?

Angel investors are easily distinguishable from other types of investors, such as venture capitalists, through several factors:

  • They invest their own money into the project, less than would be invested by a venture capitalist
  • They make their own decisions concerning investments
  • They invest according to the viability of the project, with expectations of future gains
  • Their main objective is to receive a return on their investment

There are different types of business angels and their relationship to your business. They can be affiliated; which can include suppliers, customers, or even competitors. They can also be nonaffiliated; which means they are individuals without a previous connection with your company.

Business angels can be an excellent way for a new company to gain ground quickly and step into a new stage of growth. By providing capital and guidance, the investment can have a substantial impact on the business.

Angel investors essentially provide a bridge between a fledgling business concept and a company that is developed enough to receive funds from a venture capitalist.

Business angels and Debitoor

Using a cloud-based invoicing and accounting software such as Debitoor is an easy way to illustrate that you are on top on your company’s finances.

This is a crucial part of attracting investments from sources such as business angels.