What do Business Angels Look Like?


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A business angel is a person who provides capital from his own funds to a private business owned and operated by another person who is neither a friend nor a family member.

The typical angel is often described as a wealthy, retired, former tech entrepreneur who regularly invests in other people’s start-ups. While a few angels look like this, the typical angel does not.

• Most angels aren’t wealthy. Estimates based on data from several sources suggest that the majority of angel investors are unaccredited investors.

• Few angels are retired. About two thirds are still working full or part time.

• The majority of angels live in two earner households.

• Most angels aren’t old. Surveys show that the odds that a person makes an angel investment peaks at between 45 and 54 years of age.

• Angels are more educated than the rest of the U.S. population, but one quarter of them have not graduated from college.

• Angels are no more likely to be experienced entrepreneurs than friends and family investors.

• Angels tend not to make many such investments, with a significant minority making just one angel investment in their careers.

Of course, the most successful angels differ from the typical angels. (I will write about how in another post.) But the typical angel isn’t a retired former hotshot Silicon Valley tech entrepreneur.

You can find out more about angels in Fool’s Gold: The Truth Behind Angel Investing in America

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About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool’s Gold: The Truth Behind Angel Investing in America; Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By; Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures; Technology Strategy for Managers and Entrepreneurs; and From Ice Cream to the Internet: Using Franchising to Drive the Growth and Profits of Your Company.

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Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.