What are Angels?

Angels are individuals who invest their own money in early-stage startups, and the word is everyday shorthand for angel investors.

How do angels work?

Same mechanics as any angel investor: a personal check, usually into a SAFE or a convertible note, at the stage before funds arrive. The plural describes the group around a company. Saying you raised from angels means a set of individuals rather than an institution. Founders also run into angel groups, where members meet, share diligence, and often invest through an angel fund or an SPV.

Why do angels matter?

They are the first capital most startups can actually get. A fund needs a thesis and a committee. An angel needs conviction and a wire. That gap is what carries an unproven company from an idea to something a seed fund will take a meeting on.

Where did the word angels come from?

Broadway. Patrons who funded productions were called angels because the show did not open without them. The usage crossed into startup finance in the late 1970s and stuck.

How do you find angels?

Start with operators one step ahead of you in your market, since they understand the problem without a deck. Get warm introductions from founders they have already backed, because angels invest on trust. Ask every one of them for two more names before you leave the meeting. And screen them the way they screen you: a bad angel is a permanent line on your cap table.

Bottom line: Angels are the people who fund you before a fund will.

For more startup terminology, visit startupdefinitions.com.