Shaimaa Ibrahim

Startups depend on various sources to secure the necessary funding for their businesses, notably the angel investors who play a crucial role in the startup ecosystem. 

An angel investor is an individual who provides funding for startups at a very early stage, once or in a consecutive manner, in exchange for equity or ownership in the company.

Along with the financial backing, angel investors often provide mentorship and support entrepreneurs to grow their startups.

What angel investors provide for startups?

Angel investors can support startups in different ways, including:

• Securing funding to grow.
• Providing necessary support, expertise, and consultancies about business management.
• Helping entrepreneurs make decisions to enhance their competitiveness. 
• Unlocking cooperation opportunities with potential partners and reaching new customers.
• Enhancing the startup’s credibility to attract potential investors and partners.

Types of angel investors

There are several types of angel investors who foster entrepreneurs, notably:

• Family and friends: Many entrepreneurs first turn to their family and friends when seeking funding for their business; however, this type does not provide entrepreneurs with the expertise they need to get off the ground.
• The Domain Angel: investors in this category are usually operating executives who have spent their entire careers in a specific industry or sector.
•  The Angel Investor Group: this category comprises individuals who provide support for small startups or entrepreneurs.
• The Fellow-Entrepreneur Angel: this type includes entrepreneurs who provide funding for other junior entrepreneurs.
• The True Believer Angel: this type includes investors who hear a startup’s story, instantly believe, and want to immediately invest in spite of the financial risks.

Translation: Noha Gad