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Definition: Angel investor

Christina Hernandez Sherwood, eMed Editor, MedCity News

Definition: Angel investor 

Angel investors are wealthy individuals who are often former entrepreneurs. They've built successful companies and have money and advice to reinvest in promising new startups. Angels can be a major source of funding for healthcare entrepreneurs.

In exchange for investing in a startup, angels typically expect to own between 20 percent and 40 percent of the company. They want to see a return better than what they could get from a bank or stock portfolio, usually between 20 percent and 25 percent annually. Angels don't typically expect a board seat, although some angel groups will request one with larger investments.

Related: Funding Sources for Life Science Startups

Definitions are a weekly feature on eMed for current and aspiring healthcare entrepreneurs.

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