Business angels are private individuals who invest their own money in high potential start-ups in exchange for a share in the company, and also contribute their expertise in business management and their personal network of contacts. These companies are not held by either family or friends. As such, business angels play a crucial role as providers of early stage, informal, venture capital and competences at the seed and/or development stages of the business lifecycle. Angel intervention is long-term, active, and may take a variety of forms.

The role of business angels is especially important in view of both the decreasing levels of formal venture capital investment at these stages and the growing average amount of individual deals. Angel investors typically invest at an earlier stage of growth and provide more business guidance than venture capital providers. Therefore, angel investors are key players in generating high-growth companies essential to regional economic development.

Formal venture capital operators invest a minimum of  2.5 million€ in companies, which leaves a market gap or failure in smaller amounts of equity. Individual business angels invest between 20.000€ and 250.000€. The average amount invested per individual in Europe is 80.000€ and up to 250.000€, depending on the business type and the region. These amounts can increase when business angels co-invest with other investors or through a co-investment fund.