Business angels, or angel investors, make up an integral part of the start-up ecosystem – they invest their personal capital in small and medium-large companies at the early stages of their growth. These investments usually occur in the expansion stage of the company lifecycle (i.e. seed). Invested companies can then improve their cash flow and cover later stages of IT development or scaling. Some investors invest for profit and an attractive return on their investment. The latter is usually higher than for other investment options but also reflects the greater risk the investor bears. Other business angels look to make an impact in industries they are particularly interested in or passionate about.

From the start-up's perspective, angel investors bridge the gap between FFF financing (founders, family, and friends) and venture capital funds. The main feature that distinguishes business angels from other sources is that they often offer so-called smart money. They bring professional experience, contact networks, and business know-how along with financial capital. Due to the nature of angel investing, business angels are often high net worth individuals (HNWI) who have rich experience in running their own business ventures or managing businesses and organizations. Their experience allows them to share valuable advice and connections with budding entrepreneurs, and these might be just as important, if not more so, than the money itself.

Compared to the US, Europe does not set any formal accreditation qualifying investors into the role of a business angel. The average volume of investment into start-ups varies widely and investors often syndicate their investments, when multiple investors participate in a particular investment. To improve their access to investment opportunities, angels unite in angel networks or form less formal investment vehicles.