Angel investors around the world

Angel investors have a long history as informal investors within the narrow subset of the private equity (PE) market. The first ‘angel investors’ were wealthy individuals who funded expensive Broadway productions, and this term was later used by William Wetzel to describe investors who fund entrepreneurs. Angels usually are found among the friends and family members of entrepreneurs. Their financial support can consist of a one-time injection or can be ongoing over a start-up’s lifecycle. In addition to financial support, angels often provide managerial assistance and coaching and they prefer to invest in local firms, and in general do not use conventional control mechanisms, such as entering contracts, sitting on boards, or staging financing, and they hold smaller positions in investee firms than venture capital (VC) fund investors. Angels are playing an increasingly important role in funding entrepreneurs at the seed and early stages, and indeed their importance in the entrepreneurial economy has been recognized even more in recent years and many researchers have found angels’ importance to the start-ups to be equal to that of VCs, with the total angel market being approximately the same size as the VC one.

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