What Is an Angel Investor & How to Find One

Angel investors are an important part of the business funding landscape in the UK. But what is an angel investor, and how could they benefit your business?

By Kate Josselyn

If you’re looking to grow your business, you might have come across the term angel investor.

Angel investors (also known as business angels or angel financiers) are individuals who invest their own money into early-stage companies in exchange for equity.

But how do they work? How are they different from venture capital firms? And how do you actually find angel investors in the UK?

Here’s what you need to know.

What is a business angel investor?

A business angel investor is someone who funds startups and growing businesses in exchange for shares in the company. They’re often a high-net-worth individual, but can also qualify through business experience as a self‑certified sophisticated investor.

You might also hear them called:

Business angels
Angel financiers
Private investors

Unlike banks or lenders, angel investors use their own personal funds. In return, they get equity, meaning they own a percentage of your business.

What do angel investors provide?

Angel investment isn’t just about money. Because many angels have entrepreneurial backgrounds, they often support early-stage companies beyond the initial investment, offering:

Industry experience
Mentorship
Strategic advice
Access to networks
Introductions to customers or suppliers

How does angel investment work?

Angel investment is most common in early-stage businesses that may struggle to secure traditional lending due to a limited trading history. It usually follows this process:

A founder pitches their business idea.
An angel investor agrees to invest capital.
Shares are issued in exchange for funding.
The angel may take an advisory or board role.

Investment amounts vary, but angel investors often provide tens or hundreds of thousands of pounds in early funding rounds.

In return, they expect:

Equity growth
Future dividends
Or an eventual exit (such as selling the company or an initial public offering (IPO))

Are Dragons’ Den angel investors?

Yes. This term is likely familiar to fans of the show. On Dragons' Den, entrepreneurs pitch to wealthy business figures who invest their own money in exchange for equity. That’s essentially what angel investors do.

However, television deals are highly public and structured for entertainment. In reality, angel investment usually happens through private networks, introductions, or formal angel groups. These platforms connect founders with potential angel investors outside of television.

Angel investors vs. VC firms (venture capitalists)

Angel investors and venture capital (VC) firms are often confused, but they’re not the same.

Key differences

Angel investors

Invest their own money
Typically fund early-stage businesses
Offer smaller investment amounts
May take advisory roles
Often invest locally or regionally

Venture capital firms

Invest institutional money
Usually fund high-growth scale-ups
Invest larger sums
Often take board seats
Expect aggressive growth targets

Some founders may prefer European angel investors, not VC firms – this is often because they want:

Smaller, early-stage funding
More flexible terms
Less institutional control

Across Europe, angel investors tend to support businesses at an earlier stage than traditional VC firms, making them more accessible for startups without extensive trading history.

VC firms, on the other hand, usually look for companies with proven traction and scalability.

Advantages of angel investment

Angel investment can be highly beneficial, particularly for startups, because it offers:

Access to capital without immediate repayments
Mentorship from experienced entrepreneurs
Industry connections
Increased credibility

Because funding is exchanged for equity, there are no monthly loan repayments. For businesses focused on rapid growth, that can reduce short-term cash flow pressure.

The disadvantages of angel investors

Angel investment is not free money.

When you accept angel funding, you are giving away part of your business.

You lose a percentage of ownership
Major decisions may need investor approval
Future profits are shared
Investors can influence strategy

Even if the equity stake seems small at first, it can become significant over time – especially if you go through multiple funding rounds.

Some founders later regret giving away equity too early, particularly if their business grows rapidly.

It’s important to ask:

How much control am I willing to give up?
Am I comfortable sharing decision-making?
Do I need investment, or just funding?

How to find business investors in the UK

1. Join angel networks

Angel networks connect founders with investors. Examples include:

These platforms allow you to pitch your business to registered angel investors.

2. Attend pitch events

Many regional business hubs host:

Startup pitch nights
Investment forums
Accelerator demo days

These events are often attended by business angels looking for opportunities.

3. Use online investment platforms

Equity crowdfunding platforms allow multiple smaller investors to back your business.

Popular platforms include:

This approach can broaden your exposure but may result in many small shareholders.

4. Use professional introductions

Accountants, solicitors and business advisers often have investor networks. A warm introduction can significantly increase your chances of securing funding.

Is angel investment right for your business?

Angel investment is often suitable if:

You are pre-profit
You have high growth potential
You are comfortable giving away equity
You want strategic mentorship

However, if your business is already trading and generating revenue, you may have other funding options available.

Need funding but want to keep your equity?

Angel investors can give valuable capital and expertise, but they need equity in return.

If you want funding without giving away shares or control, a business loan may be a more suitable option.

With a business loan:

You keep 100% ownership
You keep full control of decision-making
You agree to fixed monthly repayments
Once repaid, the relationship ends

At Fleximize, we offer unsecured and secured business loans from £5,000 to £500,000, with fixed monthly repayments, fast decisions, and no early repayment penalties.

For many established SMEs, debt finance can provide the growth capital they need – without sacrificing long-term ownership.

If you’re exploring funding options, compare business loans today and see how much you could borrow.

Apply now to check your eligibility.