Note on Angel Financing

This teaching note discusses the market for investments from private, non firm-related, investors, mostly high net-worth individuals. Some of the topics are: the growing scale of angel investors, their investment characteristics, the inefficiency of this market, and comparison to venture capital. Also, the note gives advice on how to find an angel, how to move through the process of receiving angel investment, and how to negotiate with them. Then, the note gives some hints on post-financing angel involvement. The note concludes with a number of angel vignettes, that give some representative stories about finding and working with angel investors.