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Key takeaways
A business angel is a private individual who invests their own money in startups at an early stage and often brings experience and contacts.
The angels surveyed by the German angel association BAND invested an average of around €66,000 per funding round in 2025.
In a large US study, just under 70 percent of angel investments returned less than the amount invested, and 10 percent of exits (sale or IPO) generated 85 percent of all cash returned.
Angels therefore spread their money across several startups and keep reserves for later rounds: 43 percent of the investments made by BAND angels in 2025 were follow-on investments.
With beel, you become a business angel yourself: in a syndicate, an experienced angel, the lead, shares individual investment recommendations, and you decide on each one yourself.
A business angel is often the first investor to believe in a startup: according to startupdetector's Business Angel Report 2023, 74 percent of first investors in German startups are angels. If you want to invest like that yourself, you need more than money. You need access to startups and time for due diligence, contracts and admin. This article explains what an angel does, how they invest, what they get in return and how you can become one.
What is a business angel?
A business angel is a private individual who invests their own money in young companies, usually at an early stage when banks and funds do not yet get involved. In return, they receive a stake in the startup. In English, they are also called angel investors.
An angel often brings more than money: experience as a founder or manager, contacts to customers and later investors, a critical eye on the business plan. This is known as smart money, meaning capital plus know-how.
What an angel actually does
Invest: They provide money at a stage when the startup often has no meaningful revenue yet.
Advise: They support the founders on strategy, finance or sales, depending on their own experience.
Open doors: They make introductions to customers, employees and investors for the next funding round.
How much time an angel puts in is up to them. Some talk to the founders every week, others only get in touch when asked.
Who counts as an angel is not formally defined. There is no exam, no licence and no legal minimum amount. Anyone who privately invests their own money in a startup is an angel. Many also support the startup with experience and contacts.
Estimates put the number of business angels in Germany at 6,000 to 9,000. Around 1,500 of them are organised in some 40 regional networks, with the Business Angels Netzwerk Deutschland e.V. (BAND) as the umbrella association. According to the BAND long-term study, more than half of the angels surveyed in 2025 were over 50. The share of women rose from 14 percent in 2024 to 18 percent in 2025.
Business angel or venture capital: the difference
The key difference: a business angel invests their own money, a venture capital fund (VC fund) invests other people's money. A VC fund raises capital from investors such as insurers and pension funds. Within a fixed term, often around ten years, it has to sell its stakes again and distribute the proceeds to its investors.
Startups raise money in rounds. Pre-seed and seed are the first funding rounds, often before the startup has meaningful revenue. Series A is the first large round after that.
Feature | Angel | VC fund |
|---|---|---|
Whose money | their own | the fund investors' |
Entry point | pre-seed and seed, often as the first investor | usually later, from seed or Series A |
Amount per round | around €66,000 on average in 2025 (BAND) | significantly larger |
Decision | alone, at their own discretion | the fund's committee, based on fixed criteria |
Support | personal, often as a sparring partner for the founders | through regular reports and boards |
So angels usually finance the beginning and VC funds the growth. This matters to you as an angel, because your stake changes with every later funding round.
How much does an angel invest, and what do they get in return?
The 107 angels surveyed by BAND invested an average of €66,468 per funding round in 2025, down from €194,449 in 2018. This amount is called the ticket. According to the German government's founders' platform, the average ticket of a single angel in pre-seed rounds is around €40,000, with €25,000 to €100,000 being common.
What they get in return is a stake in the startup. Its size depends on the ticket and the valuation. The valuation is the price that founders and investors put on the whole company. The calculation uses the valuation after the round, the so-called post-money valuation, which already includes the new money.
An example: you invest €50,000, and the startup is worth €2 million after the round. Your stake is then €50,000 divided by €2,000,000, or 2.5 percent. How much equity an angel gets is therefore not a fixed figure but a calculation. If they invest via a convertible loan, the percentage is only fixed once the loan converts into a stake in a later round.
Money only really comes back at the exit, meaning when the startup is sold or goes public. That typically takes four to seven years. Young startups rarely pay out profits, because they put the money into growth.
Returns and risk: why an angel needs several startups
Most angel investments return less than the amount invested, and a few hits deliver most of the cash returned. A 2016 US study by the Angel Resource Institute covering 245 startups with a known outcome shows: just under 70 percent returned less than the capital invested, and 10 percent of exits generated 85 percent of all cash returned.
The German figures fit this picture. In 2025, the angels in the BAND study recorded 23 successful exits and 55 failed investments.
With a single investment, you put everything on one card. Only with a portfolio, meaning several investments, does the chance increase that you are in one of the rare hits. The angels in the BAND study held ten investments on average in 2025. But a portfolio does not protect you against losses either: every single investment can fail completely. So only invest money you could afford to lose.
What comes after the investment
After investing, an angel often stays with the startup over several funding rounds: of the 314 investments made by BAND angels in 2025, 136 were follow-on investments, or 43 percent. A follow-on investment is money an angel puts into a startup they already hold a stake in, €54,492 on average.
New funding rounds: Startups usually raise money over several rounds. If you do not invest again in a new round, you are diluted. Dilution means your stake gets smaller because the startup issues new equity to new investors. If the startup from the example above gives 20 percent to a VC fund in the next round, your stake falls from 2.5 to 2.0 percent. If the valuation rises, the value of your stake can still grow. If you want to invest again, you need a reserve.
Support and admin: On top of that come the founders' updates, documents for your tax return and formalities. Anyone who takes over classic shares in a German limited company (GmbH) becomes a shareholder and already needs a notarised declaration to come in. Every later capital increase, meaning every round with new shares, changes the articles of association and requires a notarised shareholder resolution. Depending on the agreements, the angel takes part in it, in person, by proxy or by video.
Becoming a business angel: what you need
If you want to become a business angel, you need three things: free capital, access to startups and time for due diligence.
Free capital: Invest money you will not need over the next few years and could afford to lose. Work with a figure that is easy to follow: ten investments of €50,000 each, which is the average number of investments BAND angels hold, add up to €500,000 over several years, plus a reserve for follow-on investments.
Access: Without a network in the startup scene, it is hard to hear early about startups that are raising money. Classic routes are regional business angel networks, pitch events, meaning events where startups present themselves to investors, and contacts with other angels. Or you invest through our syndicates on beel, more on that below.
Time: Every investment needs to be checked: team, market, numbers, contract. This review is called due diligence and takes several conversations and evenings with documents per startup.
Five steps to your first angel investment
Set a budget: Decide how much you want to invest over the next few years and divide it by the number of startups you want to invest in.
Use free capital only: A large share of investments returns less than invested. So only invest money you could afford to lose.
Choose your access: on your own through your network, through a business angel network or through a syndicate in which an experienced angel shares investment recommendations with you.
Review your first startups: Read the pitch deck, meaning the startup's presentation, and the contract, talk to the founding team and compare the valuation with similar startups.
Keep a reserve: Set aside part of your budget for follow-on investments.
How gains and losses from your investments are taxed depends on the type of investment. Clarify this with your tax adviser before your first investment.
Becoming a business angel with beel
With beel, you start as an angel without first building your own network: you invest in a syndicate alongside an experienced lead.
A syndicate is a group of investors who invest in startups together. The lead is an angel with a track record, meaning proven experience from earlier investments. They curate startups, in other words select which ones to recommend, and share individual investment recommendations with the members of their syndicate. The lead decides who is admitted.
Investment recommendations from experienced leads: You get access to startups that are hard to reach on your own and decide on each recommendation whether and how much you invest. The ticket is within the range the lead sets, which depending on the syndicate can also be below €50,000. You can join several syndicates.
Your own dashboard: You see all your investments in one place.
Reviewed contract templates instead of a notary appointment: Every deal, meaning every single investment, uses standardised, legally reviewed contract templates. If you invest via equity profit participation rights (Eigenkapital-Genussrechte), you do not need a notary appointment and you are not listed in the shareholder list (Gesellschafterliste) filed with the commercial register (Handelsregister). An equity profit participation right puts you on an equal economic footing with a shareholder for profit distributions and at the exit, without voting rights and without shareholder status. There is no special purpose vehicle (SPV) that pools investors' money and causes its own admin costs: you invest directly in the startup.
Each lead sets their own fee, usually as carry: an agreed percentage of your profit, due only once an investment generates income or profit. And if you want to get out before the exit, you can offer your equity profit participation rights on the beel secondary market, provided the startup has enabled trading. The secondary market is a marketplace where investors sell existing investments to each other. A sale is not guaranteed.
You are a business angel in the process: you invest your own money, make every decision yourself and build your portfolio deal by deal. The due diligence and the final decision are yours. The lead acts as a signal and a filter and gives you access to deals you would not otherwise have. We introduce some of the leads running syndicates on beel in our article How to invest in startups.
Conclusion
An angel invests their own money in startups early on, around €66,000 per round on average among the angels surveyed by BAND in 2025. Because just under 70 percent of investments returned less than invested in a large US study, an angel needs several investments: ten investments of €50,000 each come to €500,000, plus a reserve for follow-on investments, which made up 43 percent of all angel investments in 2025. Add to that access to startups, due diligence, contracts and admin. With beel, the path is shorter: an experienced lead shares investment recommendations, you decide yourself, and the contract templates are ready. If you are a private investor thinking about becoming a business angel or getting started with startup investments, our syndicates are the right way in.
Become a business angel with beel
At beel, we built our syndicates for private investors who want to become angels themselves without doing everything alone. Find a lead whose focus and track record suit you, and decide on each investment recommendation whether you want to take part. You can find syndicates and their leads at beel.com/en/invest.
Frequently asked questions
How do I get access to good startup deals without my own network?
One direct route is an angel syndicate: an experienced angel, the lead, shares individual investment recommendations with the members. Alternatively, you can join a regional business angel network or attend pitch events. On beel, you decide on every deal yourself whether to invest.
Can I invest in startups together with experienced angels?
Yes, through an angel syndicate. A lead with a track record curates startups and shares individual investment recommendations, and members co-invest deal by deal. On beel, this works without a special purpose vehicle and without a notary appointment, via equity profit participation rights (Eigenkapital-Genussrechte).
What are the minimum amounts for startup investments through syndicates?
Each lead sets this for their own syndicate. Classic angel tickets are usually between €25,000 and €100,000; in syndicates, smaller amounts are possible depending on the lead. You can see the exact minimum for each syndicate.
How much money do you need to become a business angel?
There is no legal minimum. But because a large share of startup investments returns less than invested, your budget should cover several investments: ten investments of €50,000 each come to €500,000 over several years, plus a reserve for follow-on investments. Through syndicates, smaller tickets are possible depending on the lead.
How much equity does a business angel get?
That depends on the investment and the startup's valuation. Anyone who invests €50,000 in a startup worth €2 million after the round holds 2.5 percent. In later funding rounds, the stake becomes smaller if the angel does not invest again.
What is the difference between a business angel and venture capital?
A business angel invests their own money, a venture capital fund invests its investors' money. Angels usually come in earlier and with smaller amounts and support the founders more personally. VC funds come in later with larger sums and decide based on fixed criteria.
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