A business angel is a private individual, often with a high net-worth, and usually with business experience, who directly invests part of their assets in new and growing private businesses. Business angels can invest individually or as part of a syndicate where one angel typically takes the lead role.
Besides capital, angel investors provide business management experience, skills and contacts for the entrepreneur. Experienced angels also know that they may have to wait for a return on their investment. They can, therefore, be a good source of ‘smart and patient’ capital.
Business angels play an important role in the economy. In many countries, they constitute the second-largest source of external funding in newly established ventures, after family and friends. They are increasingly important as providers of risk capital and contributors to economic growth and technological advances.
Tools to promote business angel investment are the responsibility of EU countries. They should create incentives for private individuals who are willing to invest in enterprises. This should include the use of public funds for co-investment with business angels.
The European Commission encourages EU countries to learn from good practices by supporting business angel investments, particularly across borders, and by cooperating with venture capital funds. The Commission is also supporting good practice in investment readiness training.
The goal of this initiative – funded by the European Parliament - was to support women entrepreneurs in accessing alternative sources of funding: by raising the awareness of business angels, training women who would like to become business angels and helping women entrepreneurs to present their business ideas to potential investors. The network was created in 2017, through 4 projects covering 14 EU countries.
See the support tools and networks for women page
The study is based on documental research, a survey, and a series of interviews with business angels and entrepreneurs from 33 European countries. It gives detailed insight into their economic and professional behaviour throughout European venture capital markets and national contexts. The document also presents best practices for support measures and innovative schemes for business angels’ investments, as well as policy measures to support business angels.
See the study on business angels’ funding impact on R&I
In 2017, we published a study to evaluate existing tax incentives schemes for venture capital and business angels, analyse and assess possible designs for potential new schemes, and put forward policy recommendations for the future.
See the study on tax incentive schemes
This guidebook describes how to support investments and co-investments of business angels in sectors, regions or EU countries where their presence is still limited.
Download the guidebook