Many start-up companies cannot raise venture capital investment. This is usually because they are simply too small to interest venture capitalists, who typically have lower limits on investments of a million pounds or more. They also usually too high risk to be able to borrow.
Angel investors provide an alternative. They are usually individuals rather than funds or financial institutions. Like venture capital companies, they are likely to be involved in the running of businesses they invest in - even more so that venture capitalists.
Angel investors make almost always equity investments, as these are able to provide a return that reflects the high risks of investing in small start-ups.
Angel investors are very often individuals with experience relevant to the businesses they invest in. They are often able to make a valuable contribution to the management and running of their investments.