What is Angel Round?
An angel round is a financing round for startups typically led by wealthy individuals known as angel investors. Angel rounds are smaller than institutional rounds, such as Series A or B, but the terms are usually more favorable.
Understanding the Angel Round
An angel round is typically defined as the first round of funding for a startup company. An angel round is designed to assist a startup in getting off the ground and growing from its early stages. It can be used for varies things, including product development, hiring, and market expansion.
1. The amount of money raised is typically smaller than that of a venture capital round.
2. The investors are typically high-net-worth individuals rather than institutional investors.
3. The investment is typically made in exchange for equity in the company.
4. The terms of the investment are typically less favorable to the investor than in a venture capital round.
5. The investment is typically made at an earlier stage of the company’s development than a venture capital round.
An angel round is a critical milestone for early-stage startups because it provides the much-needed fuel to get the company off the ground and keep growing.