An Angel Investor is an individual who invests in young, start-up companies.
They’re called “Angels” because, to a struggling entrepreneur in need of capital, that’s exactly what they seem to be.
In exchange for providing a start-up with investment capital, angels receive a stake in a young company—and since they’re getting involved before everyone else, that stake can be significant.
Historically, to be an angel, you needed to be what’s called an “accredited” investor.
According to current SEC regulations, in order to be considered accredited, you need to have a net worth of at least $1 million, or you need to earn at least $200,000 in annual income, or $300,000 if combined with your spouse.
But in the very near future, this will no longer be the case.
Very soon, due to a new set of laws known as The JOBS Act, everyone—regardless of their income or net worth—will have the chance to become an Angel.
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