Angel investors and angel funds

Angel capitals are a common type of seed money, which provide financial support to a new startup. Angel funds are investment funds where the money is pooled from angel investors. Angel investors are normally high net worth individuals or companies with insights on industries they invest in.

More specifically, they are also called an angel funder, business angel, private investor, seed investor, or informal investor. Angel investors have the following characteristics:

• Need to satisfy the Securities and Exchange Commission (SEC) standards for accredited investors with a net worth of $1 million or more and at least an annual income of $200,000
• Invest in small startups or entrepreneurs, who are among an entrepreneur's family members or friends
• Sometimes invest online through equity crowdfunding
• May provide advice to their invested companies
• Typically use their own money instead of pooled money from others
• Provide capital, usually in exchange for convertible debt or ownership equity
• By pooling an angel investors' money into an angel fund, a fund can invest a large sum into a project and gain better negotiating powers