Meaning in simple terms: Angel investing is when a rich individual, referred to as angel investor (also known as a private investor, seed investor), invests money in a new company or a startup, in exchange of shares in that company or startup.
Angel investing is a type of private equity investing, in which high net worth investors known as Angel Investors provides capital to a business startup at the very early stages in exchange for convertible debt or ownership equity. This type of investing require taking more risk compared with investing in the public markets, but leads to much higher earnings if the business startup is successful.
Angels typically invest their own funds (usually in seed funding stage), unlike venture capitalists, who manage the pooled money of others in a professionally managed fund.
Investing wise, not all angels are equal, and there is no “set amount” for angel investors; an investment done by an angel investor can range from a few thousand to a few million dollars.
Angel investors have a huge investing power, in 2010 angel investors in the U.S. invested in more than 60 times as many companies as venture capital firms, even-though the the combined value of all angel investments ($20.1 billion) was slightly less than VC firms($23.26 billion).