According to its literal translation, the business angel, or "angel investor," is an investor who decides to financially support a company whose project seems to him to be innovative. In addition to a share of his assets, this natural person makes his experience and all of his skills in the entrepreneurial field available to the entrepreneur.

1. What is a business angel?

A business angel is a natural person who invests part of his financial assets in innovative companies with high potential.

The business angel is often an active business executive or a former entrepreneur; he (or she) therefore has a real experience of entrepreneurial life which leads him to share his address book and to give sound advice to promote the development of the company and lead it to success. The main objective pursued by a business angel is to generate substantial added value through his investment.

2. Characteristics of the business angel

Here are some specific traits found in the majority of business angels:

  • They invest their own funds to finance the project, unlike venture capitalists whose core business is investing in unlisted companies.
  • The choice to bring their investments to the company in order to finance its development or not depends only on them.
  • They support entrepreneurs with whom they have no family ties or friendships (hence the angelic character!).
  • Investments generally relate to solid and viable projects since business angels often expect future consideration.
  • The main objective is the profitability of the investment.

Anyway, it is essential to contact business angels to be able to find capital and implement the economy of a solid and well-crafted business plan!

3. When should you call on business angels?

Business angels provide financing solutions only for innovative projects (technological innovation or other) with high added value and with exponential growth potential.

On the other hand, the fact that the projects belong to an economic sector or their geographical location does not present any particular barriers, even if this can sometimes hold their attention.

Business angels not only provide funds to strengthen the company's equity and allow it to break into its market but also their experience and skills.

In general, they remain a minority shareholder in the company's capital (share of capital less than 20% on average) but participate actively in the life of the company and in decision-making. For these reasons, many of them favor local businesses and prefer to invest in local projects (in their department or region). In addition, some specialize in a specific economic sector (health, digital, etc.) for reasons related to their professional experience.

Business angels intervene on amounts that generally do not exceed 1 million dollars (on average between 300,000 $ and 500,000 $) when they come together to finance a project in which they "believe." They finance both business creation projects in the start-up phase (research and implementation of the project) and business projects in the development phase of a new product/service or new outlets.

The "average ticket" (annual sum invested by a business angel) is $10,000 to $20,000.

4. How to appeal to a business angel?

To call on a business angel as part of your projects, you must submit a file with a specialized digital platform:

  • The file must include a summary of the creation project and a summary of the business plan over eighteen months containing the data month by month.
  • Once the file has been submitted, the project is examined on three main criteria: the amount sought, the field, and the degree of maturity of the project.
  • If the project is pre-selected, then the company must make an oral presentation to a jury made up of the network of business angels.
  • If the oral presentation has convinced one or more business angels, they will further examine the project in order to negotiate the conditions for their entry into the capital.
  • Take into account that calling on a business angel takes time; for example, it can take several months between the filing of your file and the receipt of funds.

5. Advantages and disadvantages of using business angels


The business angel has real entrepreneurial experience and offers valuable assistance beyond the capital contribution:

  • Access to the address book.
  • Expert advice to manage and develop the start-up.
  • Prevention of pitfalls to avoid.

Its participation is a contribution in skills and knowledge as well as a strengthening of the cash flow.

Benefiting from the financial support of a business angel also acts as a leverage effect for the developing company, a guarantee that promotes the arrival of other investors later on.


Certain disadvantages must be taken into account in the context of financing by a business angel:

  • Participation of the business angel in the management of the company, which reduces the entrepreneur's control over his start-up.
  • Need to provide regular business reports, which creates higher pressure for the entrepreneur.
  • Business angels generally offer medium-term financing (the main goal being to resell their shares).