Angel investors are financial investment professionals that invest in small startup businesses and entrepreneurial ventures. An angel investor often provides more favorable terms than traditional lenders such as banks, and can sometimes be a friend of the entrepreneur that receives the investment.
Generally, angel investors are primarily focused on helping a startup succeed. This focus differs from venture capitalists, who are more interested in the future profits of a startup in which an investment is made. Another distinction is that angel investors rely on their personal wealth to invest in startups, whereas venture capitalists utilize pooled assets from other investors. To qualify as an angel investor, individuals must meet accredited investor standards set by the Securities Exchange Commission's (SEC), and also have a net worth of one million dollars and annual income of at least $200,000.