Angel Investing is described as the issuance of capital from an Angel Investor, usually for the startup expenses and initial costs of a new business. Angel Investors, usually affluent individual investors, are not like venture capitalists or VC's because they generally do not invest in business requiring capital in excess of $100,000. Angel investing is usually accomplished by the investor providing the startup capital in exchange for partial ownership or equity in the startup company. Angel investors generally invest in business as a group and usually contribute between $25,000 to $50,000 each. Angel investors usually look for high return rewards with minimal risks, they look for projects that can provide at least a 10 to 20 times return on their investment. One of the most challenging parts for any business today is raising capital, especially in these hard economic times where money is scarce. Often times individual investors combine their capital and form a group, also known as an Angel Group, this makes it easier to allocate the capital between a number of angel investors instead of relying on one investor. The only problem with an angel group is that everyone has to be in accordance before proceeding with the initial rounds of funding; it is a lot easier to convince one person to invest in your human capital than ten.

Most potential investors would like a local company to invest in so they can exercise their ownership equity and make decisions. This is one of the downsides to angel investing, you lose control of your company and project and ownership is usually distributed throughout the investors. The selection process for angel capital is usually an extremely rigorous process - sometimes taking months with numerous presentations. After the investors narrow down their potential candidates for investment they usually require a follow up interview before the initial round of funding begins.

Sometimes raising capital is easier via the immediate investment route, i.e. friends and family. When direct companions invest in your company they rarely ever demand ownership or equity, they usually just want a small return on their investment.

Angel Investing is only one way of receiving venture financing, there are plenty of other avenues that one can explore.