Hear "Business Angel" and picture a TV show with sharks in a tank? In reality, a Business Angel is typically a far more low-key, experienced businessperson who invests their own money — often in businesses within an industry they know well.
Short answer: A Business Angel (or "angel investor") is a private individual who invests their own capital in a business — often early in its life — in exchange for an ownership stake. Unlike a private equity fund, a Business Angel invests their own money, not other people's, so the decision process is often faster and more personal.
What do you get beyond the money?
Most experienced Business Angels bring more than capital: industry knowledge, a relevant network, and sparring based on their own experience as an entrepreneur or business owner. In fact, a Business Angel is often the first outside investor a business receives capital from.
What does a Business Angel look for?
- A strong team — Business Angels often invest as much in people as in the product
- A real market — evidence that there's actual demand
- Scalability — can the business grow significantly with the right capital?
- Realistic valuation — unrealistic value expectations scare away experienced investors
How do you find a Business Angel?
Besides networking and industry associations, Denmark has several matchmaking platforms and angel networks. A clear, well-prepared listing describing the business and what you're looking for makes it possible for interested investors to find you — instead of you having to approach them one by one. See how to make your business investor-ready.
Business Angel vs. private equity fund
A Business Angel typically invests smaller amounts than a private equity fund, often earlier in the business's life, with a more personal and flexible process. A private equity fund invests other people's capital, has a more formalized process, and typically invests larger amounts in more mature businesses.
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