Angel investors are wealthy private investors who offer one-time funding to small business startups to help them get started. Sometimes the startups that angel investors invest in may only be partially formed companies, but they like the business ideas and think they are worth the risk.
Angel investors typically don’t involve themselves in the day-to-day operation of the small businesses in which they invest. They stay in a small business just long enough to get a return on their investment, which usually takes two to five years.
Angel investors are different from venture capitalists in that the latter are usually firms that invest in fully formed companies that need financial help. Most venture capitalists are involved in the management of the companies in which they invest and tend to stay in the companies longer than angel investors.