Simon Willison’s Weblog

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.