A wealthy individual who provides initial seed money for startup businesses in exchange for ownership equity in the company. Angel investors are often accredited investors, and many are current or former entrepreneurs themselves. They may be involved in a series of projects on a purely professional basis or may be found among an entrepreneur's family and friends.
Angel investors typically get paid through a return on their investment, either when the company they invested in goes public or is acquired. This return can be structured in the form of a one-time payout, or through a series of payments over time.