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Angel Investing: This funding round is also called Seed Funding and represents the first professional outside investment. Most founders get their seed round after successfully going through two or three of the early-stage funding strategies discussed above.
Angel investors are individuals who scout for great startup opportunities and generally make a lot of relatively small money investments in early-stage high-risk ventures. They are essentially buying lottery tickets on the character of the founder and the potential upside of a company breaking out into a huge success. They are look to make 100 times their money back if a company “exits” successfully by being acquired or going public.
Angels represent varying degrees of professional investor and they must be convinced of the potential of a startup to really scale and become hugely valuable.
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