In My Opinion by Baybars Altuntas: Difference between a business angel and an angel investor?
In the entrepreneurship ecosystem, angels are investors who have themselves been entrepreneurs and who invest in early-stage start-ups by providing up to $500K and contributing their know-how, mentorship and networking. It’s really just a question of different labels: in Europe, they are called business angels, and in the US and Canada, they’re called angel investors. We sometimes hear the term business angel investor, too.
WBAF accepts ‘business angel investor’ as the most comprehensive terminology to define angel investor activity. To me, the meaning of ‘business angel’ is somewhat narrower than ‘angel investor’. Anyone who provides mentorship and opens his or her network to entrepreneurs is a business angel. They share their know-how, but it doesn’t necessary mean they provide money. On the other hand, with the term ‘angel Investor’, it is clear that money is part of the equation. So, to me, ‘business angel’ suggests that only non-financial instruments are offered, but an ‘angel investor’ provides both financial and non-financial instruments.
If someone is putting only non-financial sources into the businesses, or if they are simply matching investors with relevant entrepreneurs, it would be suitable to call them a business angel. But if they are also putting their own money in addition to providing know-how, mentorship and networking, they are angel investors. If, on the other hand, they are only putting money but offer no non-financial support such as mentorship, they are only investors. The more comprehensive terminology is business angel investor, or angel Investor.
So you’ll notice that WBAF uses the term ‘angel investor’ in the name of the QBAC+ course: Qualified Angel Investor. We wanted to make sure that anyone holding this certificate is keen to put up his own money as well as know-how, mentorship and networking.