Angel Investor

An individual who provides financial support for a new business endeavor or startup.

A person who financially backs a new business venture or startup.

What Is an Angel Investor?

An angel investor is an individual who provides capital for an early-stage project or company, usually in exchange for equity. Angel investors are typically high-net-worth individuals with a keen interest in the potential of the crypto market and are comfortable taking risks with their capital. They may also offer mentorship or advice to help the business grow. Unlike venture capitalists, who are typically bound to a professional venture capital firm and invest a pooled sum, angel investors are lone individuals taking their own risks and financing a vision they support. 

In return for their backing, they are often rewarded with equity in the company.

In the crypto world, plenty of new blockchain companies are financed via angel investors, who are often scouted via investment and entrepreneurial networks.

Advantages of Having an Angel Investor

  1. Access to Capital: Angel investors can provide the capital needed to launch a cryptocurrency project, which is especially beneficial for startups that may not have the resources to get off the ground. 
  2. Valuable Advice and Guidance: Angel investors often have experience in the crypto industry and can provide valuable advice and guidance as the project progresses. 
  3. Networking Opportunities: Angel investors can also provide valuable networking opportunities, allowing the startup to form relationships with other industry leaders and potential investors.
  4. Increased Visibility: Having an angel investor in the crypto space can also provide increased visibility for the project, which can help attract more investors and customers.  
  5. Improved Access to Resources: Angel investors can also provide access to resources such as marketers and other investors.

Disadvantages of Having an Angel Investor

  1. Lack of Control: Angel investors typically take a passive role in the company’s operations, meaning they will not be involved in the day-to-day decision-making. 
  2. Loss of Equity: Angel investors usually take a large stake in the project in exchange for their financial support. This means that the founders and other token holders will lose a portion of their equity.
  3. Limited Resources: Angel investors typically provide limited resources in comparison to venture capitalists. This can be a disadvantage if the business needs a large amount of capital or has high growth potential. 

High Risk: Angel investors typically invest in early-stage companies, meaning they are at a higher risk of failure. This means that the investor may not be able to recoup their investment if the company does not perform as expected.