Angel investment
Experienced individuals, often investing together as a syndicate, buy a minority stake in an early-stage company and give advice and contacts as well as money.
- Shares
How it works
An angel investor puts their own money into a young business in return for shares, usually a minority stake of between 10% and 25%. Angels typically invest from £5,000 to £500,000 in any one business.
- Angels often invest together as a syndicate, with a lead angel who coordinates the deal and works most closely with the company, sometimes as an adviser or non-executive director.
- Angels are usually hands-on, and the relationship often lasts five years or more.
- Many UK angels expect the company to qualify for SEIS or EIS, which give investors income tax relief of 50% (SEIS) or 30% (EIS).
Under SEIS a company can raise up to £250,000 in total. It must have traded for no more than 3 years, have gross assets of no more than £350,000 and fewer than 25 full-time equivalent employees. Under EIS most companies can raise up to £10 million in any 12 months and £24 million in total, within 7 years of their first commercial sale.
Upsides and downsides
Upsides
- No repayments or interest
- Experienced investors bring advice, contacts and credibility
- Angel backing can help attract venture capital later
- A minority stake usually leaves founders in control
Downsides
- You give up part of the ownership of your company
- Angels are hands-on and expect a say in big decisions
- Raising can take months of pitching and negotiation
- Angels expect a way to sell their shares in future, such as a sale of the company or a listing
Risks
- Giving away too much equity early can cost you control later
- Disagreements with investors over strategy or timing of an exit
- Losing SEIS or EIS status can upset investors who relied on the tax relief
What it costs
- How it is priced
- A share of the company, usually a minority stake of 10% to 25%
- Typical range
- Usually a 10% to 25% stake, according to British Business Bank guidance
- Costs that are easy to miss
- Legal fees for the investment agreement and changes to your articles of association
- Time spent finding and pitching to investors
- Investor rights, such as vetoes over major decisions, written into the investment agreement
Typical range for one business. Syndicates and co-investment funds can provide more.
Have an offer? Dilution calculator: see what you would own after each round
Does it fit?
Could fit when
- You are an early-stage limited company with high growth potential
- You want experienced help as well as money
- Your company can qualify for SEIS or EIS
Unlikely to fit when
- You want to keep full ownership
- Your business is unlikely to grow enough to give investors a return
- You are a sole trader or partnership
Who can use it
- Business types: Private limited company, Public limited company
- Open to businesses with no sales yet
- SEIS needs a company that has traded for no more than 3 years, with gross assets of no more than £350,000 and fewer than 25 full-time equivalent employees
- EIS needs a company within 7 years of its first commercial sale, with gross assets of no more than £30 million before the shares are issued and fewer than 250 full-time equivalent employees
- Investors who hold more than 30% of the company cannot claim SEIS or EIS relief
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all private equity investment
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- Pitch deck and business plan
- Financial forecasts
- Share ownership table
Regulation and protections
There is no compensation scheme for you or the investor. Your protection comes from the investment agreement and your articles of association, so take legal advice before you sign.
Inviting people to invest is a financial promotion, and UK rules restrict it. Angel networks and platforms that arrange deals may need to be authorised by the FCA. Check before you approach investors you do not know.
Types of provider: Individual angel investors; Angel networks and syndicates; Co-investment funds that invest alongside angels.
Also consider
Sources
- British Business Bank: Angel investors · checked 7 October 2026
- GOV.UK: Apply to use the Seed Enterprise Investment Scheme to raise money for your company · checked 7 October 2026
- GOV.UK: Apply to use the Enterprise Investment Scheme to raise money for your company · checked 7 October 2026
- GOV.UK: Tax relief for investors using venture capital schemes · checked 7 October 2026
- FCA: PS22/10 Strengthening our financial promotion rules for high-risk investments · checked 7 October 2026