What is an angel investor?

Angel investors are typically high net worth individuals who invest very early into the formation of a new startup company, usually in exchange for convertible debt or equity. The role of angel investors serves as a critical bridge between the startup financing needs of a company and their larger capital needs later on.

Who can be angel investors?

In order to be an angel investor, a person does not have to be an accredited investor. However, a lot of angel investors are accredited investors.

In order to be an accredited investor, according to the Securities Exchange Commission (SEC), a person must:

1. Have made at least $200,000 a year (or $300,000, for a couple) for the past two years and must have the expectation...