Angel Investor

Definitions

A wealthy individual who provides capital to startups in exchange for equity, typically at the earliest stages when institutional investors won't touch them. The term comes from Broadway, where wealthy patrons 'angelically' funded risky theatrical productions.
In plain English: A rich individual who invests their own money in very early startups — higher risk than venture capital, often with mentorship included.
Distinguished from venture capitalists by investing personal funds rather than a managed fund. Angels typically write smaller checks ($25K-$500K), offer more founder-friendly terms, and may provide mentorship based on their own entrepreneurial experience.
Example: 'We closed our angel round — three individual angels put in $150K each. No board seats, no complicated terms, just a SAFE note.'
Source: financial distinction

1920s: Broadway producers coin 'angel' for wealthy patrons who finance theatrical shows
1978: William Wetzel at the University of New Hampshire adapts the term for individuals who invest in startups
2004: Y Combinator and AngelList formalize angel investing, creating platforms that democratize early-stage funding