Angel investing is a form of Private Equity.  "Angels", as it were, typically fund high-growth start-ups or early emerging companies with a promise of high return and an early exit.   Because these types of companies are in their initial phases, they are risky and generally not financeable by traditional bank or institutional financing.  In contrast, Angel investors are typically wealthy individuals or groups of private investors that spread the risk by pooling investments in several companies.   They are willing to invest in unproven start-ups because of the high return on investment if the company is a success. The investments typically occur after Friends and Family, in Series A or Series B round.  Angel funds may be the sole source for additional Private Equity funding for the company, or Angel funds may be a precursor to later Venture Capital funding.  Angel investors generally look for a return of 5-10 times their investment over 5 to 7 years.  The funding is pricey (because the risk to the investor is high), but may be the only viable source of funding for hungry start-up.