What is meant by 'angel investing'?

Angel investing refers to the financial support that high-net-worth individuals provide to startups and early-stage companies. These investors, often referred to as "angel investors," typically contribute their personal funds in exchange for equity or convertible debt in the startup. This form of investing is crucial for entrepreneurs who may not yet qualify for traditional financing options or are seeking initial funding to get their business ideas off the ground. Angel investors often bring not only capital but also valuable industry expertise and networks to the startups they invest in, which can significantly enhance the chances of success for these new ventures.

The other options describe different types of funding mechanisms but do not capture the essence of angel investing. Government grants are provided to support small businesses but do not involve investment in exchange for equity. Bank loans are a common form of financing for established companies with a track record, not for startups seeking initial capital. Venture capital typically comes from professional investment firms targeting more mature companies with higher growth potential, which is distinct from the individual investment approach of angel investors.