An angel investor is a wealthy individual who invests their own money in early-stage startups, usually in exchange for equity, at an earlier stage than venture capital firms.
An angel investor is typically a successful entrepreneur or professional who backs very early-stage companies with their own capital, often before a business has the traction that venture capital firms require. Beyond money, many angels bring experience, mentorship and connections that can be as valuable as the funding.
Angel cheques are usually smaller than VC rounds and come at the seed stage, in exchange for equity or convertible instruments. In Canada, certain provincial tax credits encourage angel investment in qualifying small businesses, improving the after-tax return for the investor.
A founder raises $150,000 from an angel investor at the seed stage, giving up equity. The angel, a former industry executive, also opens doors to customers and later helps the company raise its first venture capital round.
Our certified accounting firm handles this for businesses and individuals across Canada, at fixed fees with no surprises.
Book a Free 15-Minute CallCommon questions regarding our compliance workflows and service guarantees.