A Business Angel is a person (not a company) who brings their money, experience and contacts to new companies created by entrepreneurs in order to obtain a shareholding and a future profit. By definition, business angels are not mere speculators who seek the return of capital, but want to really get involved in a project to which they can contribute something. In the same way, the investment they make is temporary, so in a period of between three and seven years they withdraw their investment, giving steps to new investors.
There are no defined profiles for this type of investors, but we can catalogue them in several groups:
Entrepreneurs or managers of experienced companies that want to give their knowledge to young entrepreneurs.
Savers (or people who have obtained considerable amounts of money in other businesses) and who want to invest their money.
Entrepreneurs with success.
According to the BBVA Bank, these are some of the characteristics of business angels:
Participate in companies in the development or expansion phase.
They get involved in the business trying to provide the maximum possible value.
Invest in sectors they know.
Their participation usually ranges between 25,000 and 250,000 euros, although there is no common denominator stipulated in this regard.
They usually maintain anonymity before third parties.
With the contribution of a business angels, the new company that is starting up gets: liquidity and financing, strength, contacts, confidence for the rest of the market, credibility and publicity (because these business angels are known in the sector).