According to the European Trade Accosiation for Business Angels, Seed Funds, and other Early Stage Market* a Business angel - is an individual investor (qualified as defined by some national regulations) that invests directly (or through their personal holding) their own money predominantly in seed or start-up companies with no family relationships. Business angels make their own (final) investment decisions and are financially independent, i.e. a possible total loss of their business angel investments will not significantly change the economic situation of their assets. BAs invest with a medium to long term set time-frame and are ready to provide, on top of their individual investment, follow-up strategic support to entrepreneurs from investment to exit. They respect a code of ethics including rules for confidentiality and fairness of treatment (vis-à-vis entrepreneurs and other BAs), and compliance to anti-laundering.
The role of business angels is especially important in view of both the decreasing levels of formal venture capital investment at these stages and the growing average amount of individual deals. Angel investors typically invest at an earlier stage of growth and provide more business guidance than venture capital providers. Therefore, angel investors are key players in generating high-growth companies essential to regional economic development.
Formal venture capital operators invest a minimum of 2.5 million€ in companies, which leaves a market gap or failure in smaller amounts of equity. Individual business angels invest between 20.000€ and 250.000€. The average amount invested per individual in Europe is 80.000€ and up to 250.000€, depending on the business type and the region. These amounts can increase when business angels co-invest with other investors or through a co-investment fund.
* "Business angels and venture investors network "BAVIN" is a full member of European Trade Accosiation for Business Angels, Seed Funds, and other Early Stage Market (EBAN).
