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What is the role of angel investors? Do they help people who find themselves in financial difficulty relating to a business failure?

25th October 2013

My answer to What is the role of angel investors? Do they help people who find themselves in financial difficulty relating to a business failure? on Quora

I’m afraid you are misinterpreting the word “angel” in the term “angel investor”.

Angel investors are the investors who make the earliest investments in a company—they are the first to take a chance on a new business.

They aren’t doing this out of altruism though—they’re doing it because if the company becomes enormously successful they will make a massive return on their investment (hopefully enough to make up for losses on other angel investments they have made).

So sadly, you can’t expect so-called “angel investors” to rescue failed businesses in order to help out the founders. That’s not what angel investment is about, despite the confusing name.

This is What is the role of angel investors? Do they help people who find themselves in financial difficulty relating to a business failure? by Simon Willison, posted on 25th October 2013.

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