Entrepreneurs are always seeking capital to grow their startups. Angel investors are one of the top sources of funding. But what is an angel investor, and how do you find one? What do they do and how do they make money? In this article, we’ll look at how angel investors operate in France, what they are, their pros and cons, how much they invest, and more.

What's in this article?

• What is an angel investor, and what do they do?
  
• When is it time to bring in an angel investor?
  
• How much is the average investment?
  
• Pros and cons of working with angel investors
  
• Who are the angel investors in France?
  
• Finding an angel investor
  
• What are the alternatives to angel investors?
  
• How Stripe Capital can help
  

What is an angel investor, and what do they do?

“Angel investors” are people who back startups with significant growth potential. They fund and advise early ventures to maximize their chances of success.

Many angel investors are often former founders or senior executives hoping to share their experience, skills, market knowledge, and network contacts with young businesspeople. Their goal is to achieve added value when they exit the business and sell their shares.

It’s important to note that by bringing in their own personal capital, angel investors become minority shareholders with rights to participate in governance and key decisions.

When is it time to bring in an angel investor?

Entrepreneurs generally call on angel investors when they are seeking funding for innovative startups. These investors finance promising projects (with high potential added value), no matter what stage of development they’re in. That means that you can seek out an angel investor whether launching your business, releasing new products or services, or looking to expand into new markets.

How much is the average investment?

Investment amounts vary from one angel investor to another. In general, angels contribute between €300,000 and €500,000 in an early venture but might commit less (€10,000 to €20,000) to limit financial risk. In 2024, members of France Angels, the French Federation of Business Angels, invested a total of €98.6 million in startups.

Pros and cons of working with angel investors

There are several benefits to working with an angel investor:

• Direct financial support to bring projects to life
  
• Access to new opportunities and faster business growth
  
• Shared financial risk
  
• Added legitimacy to the startup, making it easier to obtain other sources of funding, such as bank loans
  

However, there is one disadvantage: the entrepreneur must share decision-making and profits earned by the venture. Therefore, it’s key to choose an investor who shares your vision and aligns with your goals.

Who are the angel investors in France?

Angel investors can finance as individuals or as part of a network. These groups connect founders seeking capital to angels looking to invest. There are multiple types of networks, categorized by factors such as geographical region or industry. Examples in France include:

• France Angels, a national federation of 5,000 active angels looking to invest
  
• EuroQuity, a network started by Bpifrance
  
• Femmes Business Angels, an association of women investors
  
• Angels Santé, a group that provides support to startups in the healthcare industry
  

Finding an angel investor

There are websites dedicated to helping entrepreneurs find angel investors. First, conduct market research, then prepare an application providing details about the startup. The submission needs to contain the purpose of the venture, its target audience, business model, projected profits, costs, competition, shareholder compensation plan, and potential growth opportunities. Include a plan for the next 18 months and financial projections for the following years.

After submission, backers will review it. If selected, you will be invited to present your project before a team of experienced angel investors. The panel will carefully review the plan, then negotiate the conditions of the deal (e.g., amount, use of capital, type of support, exit strategy). You’ll sign a shareholders’ agreement to receive the funds for investment.

What are the alternatives to angel investors?

There are other alternatives to angel investing. Options include:

• Crowdfunding—a modern way to raise capital from a community
  
• Bank loans
  
• Government programs (e.g., subsidies, tax credits)
  
• Funds from family, friends, and acquaintances
  

How Stripe Capital can help

Stripe Capital offers revenue-based financing solutions to help your business access the funds it needs to grow.

Capital can help you:

• Access growth capital faster: Get approved for a loan or merchant cash advance in minutes—without the lengthy application process and collateral requirements of traditional bank loans.
  
• Align financing with your revenue: Capital’s revenue-based structure means you pay a fixed percentage of your daily sales, so payments scale with your business performance. If the amount that you pay through sales doesn’t meet the minimum due each payment period, Capital will automatically debit the remaining amount from your bank account at the end of the period.
  
• Expand with confidence: Fund growth initiatives such as marketing campaigns, new hires, inventory expansion, and more—without diluting your equity or personal assets.
  
• Use Stripe’s expertise: Capital provides custom financing solutions informed by Stripe’s deep expertise and payments data.
  

Learn more about how Stripe Capital can fuel your business growth, or get started today.