​

      An angel investor is a high‑net‑worth individual who provides early‑stage capital to startups, usually in exchange for equity or convertible securities, and often plays an active role in mentoring and guiding the founders. Their main duties go beyond just writing a check; they are expected to help de‑risk the business, support growth, and prepare the company for future funding rounds.​

1. Providing early‑stage capital

      The primary responsibility is to supply seed or pre‑seed funding when the startup is still very young, often before it has significant revenue or a formal product. Angel investors typically invest their own money (not institutional funds) into startups that may only have an idea, a prototype, or a small team.​

      They usually invest in exchange for ownership (equity) or convertible instruments like SAFE notes or convertible debt, which later convert into shares at a future priced round.​

2. Conducting due diligence

      Before investing, angels must carefully evaluate the startup across several dimensions, including the strength of the founding team, market opportunity, product or technology, business model, and competitive landscape. They review key documents such as the pitch deck, financial projections, cap table, corporate structure, and legal agreements (e.g., IP assignments, contracts, and term sheets).​

      They also assess risks such as market fit, execution risk, regulatory issues, and potential conflicts of interest, often with the help of legal or financial advisors.​

3. Structuring and negotiating the deal

      Angel investors help structure the investment terms, including valuation (or valuation cap), amount invested, equity stake, and any special rights (e.g., pro‑rata rights, information rights, anti‑dilution protection). They negotiate the deal with founders and co‑investors, ensuring that the terms are fair, clear, and aligned with both the startup’s growth plans and the investor’s risk/return expectations.​

      They also decide whether to invest individually or as part of a syndicate (a group of angels pooling capital), which can increase their influence and diversification.​

4. Offering mentorship and strategic guidance

      Many angel investors take on a mentor or advisory role, sharing their industry expertise, operational experience, and lessons from past ventures to help founders avoid common pitfalls. They may advise on product development, go‑to‑market strategy, pricing, hiring, and scaling the business.​

       They often serve as a sounding board for founders, helping them refine their vision, strategy, and key decisions, especially during critical early milestones.​

5. Providing access to networks and resources

      A key responsibility is leveraging their personal and professional network to benefit the startup. This includes making introductions to potential customers, partners, key hires (especially executives and technical talent), and future investors (like seed or venture capital firms).​

      They may also connect founders with service providers (lawyers, accountants, agencies) and help open doors to new markets or distribution channels.​

6. Supporting board and governance roles

      Depending on the deal, an angel investor may take a formal role such as board observer, advisory board member, or even a board director, especially in later angel rounds or when they are a major investor. In these roles, they participate in governance, review financials and KPIs, approve major decisions, and help hold management accountable.​

      They must act in the best interests of the company while managing potential conflicts, especially if they invest in competing startups.​

7. Monitoring performance and milestones

      After investing, angels track the startup’s progress against key milestones (e.g., product launch, revenue targets, user growth, hiring goals) and financial health. They review regular updates (monthly or quarterly reports) and may request additional information or data to assess performance and risks.​

      They help founders stay focused on critical goals and adjust strategy when needed, while also preparing the company for the next round of funding.​

8. Assisting with follow‑on funding and exits

      Angel investors often help the startup raise its next round (e.g., seed or Series A) by introducing institutional investors, participating in the round themselves, and helping negotiate favorable terms. They may also support exit planning, whether through acquisition, IPO, or secondary sale, by advising on timing, valuation, and deal structure.​

      They work with founders and other stakeholders to maximize the return on investment while ensuring a fair outcome for all parties.​

9. Managing risk and portfolio strategy

      Since most early‑stage startups fail, angel investors must manage risk by diversifying across multiple companies, stages, and sectors. They develop a personal investment strategy (e.g., how many deals to do, check size, target sectors) and maintain discipline around allocation and risk tolerance.​

      They also keep track of their portfolio, tax implications, and reporting requirements (especially if using special vehicles like SPVs or rolling funds).​

10. Acting ethically and professionally

      Angel investors are expected to act with integrity, transparency, and professionalism in all dealings with founders and other stakeholders. They respect confidentiality, avoid conflicts of interest, and honor the terms agreed upon in legal documents.​

      They also stay informed about relevant regulations (e.g., securities laws, accreditation rules) and ensure their investments comply with local and national laws.​