In common parlance, the phrase ‘angel investor’ is frequently used to term a person helping another person get their business feet off the ground.
We think of the well-to-do uncle guaranteeing a loan to his niece. We think of those kind-hearted persons giving out micro-loans of $50 or $1000 to enterprising Bangladeshi women.
Those are all worthwhile, arguably saintly. Those are not, technically, angel investors.
This textbook page at myaccountingcourse.com/accounting-dictionary/angel-investors goes into it pretty thoroughly. Per the SEC, an angel investor must be officially registered as such, but only if they qualify with annual income of $200,000 and minimum net worth of $1 million. Another statement of the definition is at investinganswers.com/financial-dictionary/businesses-corporations/angel-investor-5193.
Examples of angel investors include Jeff Bezos (the most active, according to a 2013 Forbes piece forbes.com/sites/tanyaprive/2013/12/16/20-most-active-angel-investors), Barry Beck (according to the cosmetics magnate’s Crunchbase data crunchbase.com/person/barry-beck), and Jeff Clavier (according to an analysis of the most effective angel investors conducted by Inc. Magazine inc.com/john-boitnott/15-of-the-biggest-angel-investors-of-all-time.html).
Angel investors are a vital component of the entrepreneurial process, which is itself entirely vital to the unrelenting demands of growth that capitalism requires. So long as we have people with new ideas and new ventures, we will need other people who can share that vision enough to help them see it through.
Angel Investor 