angel investor
An angel investor is a wealthy individual who puts their own money into a young business, usually very early and in exchange for equity.
In plain English
Before any fund will look at you, there is a stage where the only money available comes from individuals who believe in you personally. Those individuals are angels.
An angel invests their own money, not somebody else's. That single fact changes everything. They can decide in a week. They can back an idea on a napkin. They can be moved by a person rather than a spreadsheet. And because it is their money, they feel every loss personally, which is worth remembering when you are spending it.
The good ones bring far more than cash. Introductions, hard advice, a phone call that opens a door you could not have found. In Nigeria, where so much depends on who will take your call, that access is frequently worth more than the money.
The bad ones take a large slice of your company at the moment it is worth least, and then disappear. A founder who gave away 30 percent for a small early cheque will feel that decision for the rest of the company's life.
Take angel money from people you would want in the room during your worst month, because that is when you will find out what you actually bought.
An angel invests ₦20 million for 10 percent of your company. They also introduce you to three customers who become half your revenue. The introductions were worth more than the cheque, and both came from the same decision.
Questions people ask
How do I find an angel investor in Nigeria?
Through networks, angel groups, accelerators and, most commonly, through people who already know your work. Warm introductions do almost all of the work.
How much equity should I give?
As little as you can while still doing the deal. Early equity is the most expensive equity you will ever sell, because the company is worth least at that moment.
What is the difference between an angel and a VC?
An angel invests their own money, usually earlier and in smaller amounts. A venture fund invests other people's money, later and larger, with obligations to those people.
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