Stage 4: Early equity

Angel investors

Quick answer

Angel investors are wealthy individuals who invest their own money in early-stage companies, often adding advice and introductions, in return for equity or convertible instruments.

Best suited for

Early companies with a strong founder, a product and early traction.

Pros

  • Smart money: experience and network, not just cash
  • Faster and more flexible than institutional funds
  • Tax incentives may be available for registered angels

Cons

  • You give up equity and some control
  • Hard to find the right angel without introductions
  • Terms in the first round affect every round after

Watch out for

Have a clean cap table and understand valuation, vesting and what rights you grant.

Where to look: Venture capital & private equity

Real-world examples

Examples are drawn from public reports and are not endorsements. Results vary and are not typical.

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