Angel, Super Angel or just Investor

It's funny how much time people actually can spend categorizing things. At the same time, I believe this discussion is relevant from an entrepreneur's standpoint as you want to know whom you are dealing with. Brad has an interesting post about what defines a business angel. He's also bringing up the term "Super Angel" which I don't believe he's coined but I am hearing ever more. Most recently at the Seed Summit held by Seedcamp, the topic indirectly came up in a discussion amongst a fairly large group of angels gathered in London. What defines an angel and what are these new super angels all about? Well it's basically determined by the size of their investments and how many they make. Brad defines a typical angel as someone making an equity investment at least once a year amounting to $25k for the past four years. A super angel has invested at least $50k twice a year for the past three years. I guess you can stretch these parameters in many directions and come to your own conclusion about who is what. I believe it's simply most important to understand who is investing in your company at the seed stage. If it's a typical business angel, you will obviously get less money and probably not necessarily as much support (although this obviously varies from angel to angel). With a super angel, you'll have access to more funds and hopefully have more support as these guys are probably doing this full time. I think actually that's the biggest determinant from my perspective. A typical angel is doing his investing on the side. A super angel is probably going to be doing it full time. Now you also have what are called Super Angel funds establishing themselves. These are funds which pool angels money and tend to focus on seed stage investing. They are basically much more structured than single individuals but are also filling the gap between angels and VC's. Do you need to dwell on this long as an entrepreneur. Probably not but I think it's good to define a bit who the angels are and make it easier to determine what you can expect from whom. Particularly in Europe I believe these super angels and super angel funds are starting to replace seed stage VC's, a dying breed. This is the trend I am keeping my eye on. 

Comments

[bali luxury]

I have always thought that a real Angel Investor need to bring something else to the table other than just equity. Normally, this would be intellectual or domain specific capital.

There are people that just toss money into companies because they have a lot, are bored or think that the company has a good product or idea. Or, as you mentioned, they want to be part of "the club". However, they do not bring anything else to the table. Not saying this is a bad thing, just that I wouldn't call them Angel Investors.