Glossary · Ecosystem and support · Updated
A business angel is an individual investing their own money in very young startups, generally €10K to €100K per deal. Unlike a fund they decide alone and quickly, and usually bring operating experience and a contact book alongside the cheque.
Angels operate where no fund can: too early, too small, too uncertain. They answer to no limited partners, which lets them decide on personal conviction in two meetings where a fund would take two months.
Their logic is a portfolio governed by a power law. They know most holdings will return nothing and that almost all of the outcome will come from one or two lines. That explains behaviour founders sometimes find puzzling: an angel is not looking for a safe company, they are looking for one that can return twenty times the cheque.
The non-financial contribution is the real variable. An angel who ran a sales team in your sector is worth several times their cheque; a purely passive angel is worth only the money, and sometimes clutters the cap table. Choose them the way you would choose a partner, not the way you would choose a bank.
Example: an angel portfolio over ten years
An angel invests €500K in total, spread over twenty €25K cheques across five years.
| Number of holdings | 20 |
|---|---|
| Cheque size | €25,000 |
| Total invested | €500,000 |
| Holdings worth nothing | 12, returning €0 |
| Holdings returning the cheque | 6, returning €150,000 |
| Holdings at 25x | 2, returning €1,250,000 |
| Total returned | €1,400,000 |
| Portfolio multiple | 2.8x over ten years |
Twelve failures out of twenty, and still a portfolio that works. Remove the two best lines and the result drops to €150K on €500K invested: that is the power law, and it drives how angels behave in meetings.
The common mistake
Taking on too many angels in one round. Fifteen small shareholders with no common representative turn every future decision into a signature-gathering exercise, and Series A funds often ask for the cap table to be cleaned up before they invest.
Frequently asked questions
How much does a business angel invest?+
Usually €10K to €100K per deal, with a median around €20–30K in France. Angels organised into clubs or syndicates can write much larger collective cheques, up to several hundred thousand euros.
How does a business angel differ from a venture capital fund?+
An angel invests their own money and decides alone; a fund invests its limited partners' money and decides in committee. That produces very different cheque sizes, timelines and reporting demands: weeks and little formality on one side, months and full documentation on the other.
Related terms
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