A business angel (forretningsengel) is a private individual who puts their own money into an early-stage company in exchange for shares. Founders often underestimate the value of the time, advice, experience and access to a network that come with the investment.
Angels invest their own money
A fund manager invests other people’s capital within a mandate, subject to an investment committee and the fund’s lifetime. An angel invests their own, decides alone or in a small group, and answers to nobody.
There is no committee to schedule around, so a decision can come in weeks. There is also no mandate obliging anyone to deploy capital this year, so a sound business case alone does not guarantee funding.
Two angels who saw the same pitch can reach opposite conclusions, and neither owes you a reason. Keep several conversations running; a single decline tells you little about how others will respond.
An investor is a business angel even with a five-digit sum of any currency in a startup. Across the European networks EBAN counts, the average investment per angel per deal was about EUR 25,600 in 2024, so expect to assemble several, with a lead who organises them.
What an angel buys: shares or a convertible loan
The instrument you offer determines when you agree the company’s valuation and which rights the investor has in the meantime. Both need a general meeting decision.
| Shares | Convertible loan (konvertibelt lån) | |
|---|---|---|
| What the investor gets now | Ownership: votes, dividend rights, a place in the share register | A claim for repayment with any agreed interest, plus a right to demand shares on agreed terms |
| What you give now | An agreed percentage of the company at an agreed price | A debt on the balance sheet and a dilution you have committed to |
| When the price is set | Now, at the pre-money valuation you negotiate | Later, usually at the next priced round, often with a discount or a cap |
| Company-law basis | A share issue resolved by the general meeting | A loan with a right to demand shares issued, authorised by the general meeting |
Until the shares are actually issued, a convertible lender is a lender, with no votes, no dividend and no shareholder rights. Either way you end up with a minority co-owner, and probably several.
Menon’s 2010 report, based on Norwegian registry data, put the average business angel position at 18 per cent and the median at 17 per cent. Treat those historical figures as an indication of scale rather than a target for your round.
The money is the smallest part of the offer
At the seed (såkorn) stage, experience is scarcer than capital. A good angel brings operating judgement from having done something comparable, a network that shortens your sales cycle and your hiring, and credibility that makes the next investor take your call.
Ask explicitly for the help you need before you sign, while the answers can still change the terms. Keep a note of what was promised.
- Which of my current problems have you solved before, in your own company?
- Who are the three customers or hires you could introduce me to in the first month?
- How many hours a month do you expect to spend on this, and doing what?
- Which of your portfolio founders can I call, including one whose company did not work?
- Do you want a board seat, an observer seat, or neither?
An angel who cannot name a single introduction is offering capital only, which is a fair offer if you price it as such.
What angels expect from you in return
Agree reporting commitments before signing and record them in the investment documents. Send written updates on a fixed schedule, without being chased. Include cash, runway, revenue, hires, departures and material customer changes.
An angel who learns about a lost anchor customer three months late loses confidence in everything else you have told them. If you share the news on the day it happens, you can work on the problem together and draw on the angel’s network for help.
Expect the angel to want a say in major decisions such as new share issues, changes to the board and a sale of the company. Some will want a board seat, a working appointment with statutory duties.
Discuss whether the investor expects an eventual exit and how that fits your plans. A founder seeking a business they intend to own indefinitely needs an investor whose return expectations match that choice.
The timeline an angel accepts and holds you to
Plan for a long holding period. Five to seven years is a planning assumption, not a minimum every investment will meet, and some holdings last much longer. Agree expectations about liquidity and later funding before the investment.
Angel holding periods compiled across the literature range from about 4.8 to 8 years, and the classic US angel-returns data found successful investments returning around 2.9 times capital over an average 5.8-year hold. Angels invest earlier than funds, so add a year or two to any figure drawn from fund data.
An ordinary equity investment carries no general right to repayment next year, and a buyer for the shares may be hard to find. A convertible loan is different: repayment and conversion follow its terms and the law.
Agree the intended route to liquidity. Dividends, buybacks and capital reductions may provide distributions where lawful, but an early-stage growth investor will often plan around a sale.
In SSB’s historical series, 43.8 per cent of Norwegian limited companies founded in 2015 were still trading five years later. Of those founded in 2019, 60.8 per cent reached their first anniversary. These are different cohorts and follow-up periods.
An angel goes in expecting a chance of a big payday if they are lucky and a real risk of losing all the capital invested. Your investor has accepted that, so there is no reason to soften your own numbers when you present them.
How Norwegian angels actually invest
Most NorBAN investments are syndicated. The interested investors set up a joint investment company, put their capital into it, and that company invests in the startup. For you that means one shareholder instead of nine, one counterparty, and one lead angel who assembles the others.
NorBAN publishes figures on how its members invest. Size the round, and the ticket you ask each investor for, against them.
- Most tickets are between 0.5 and 2 MNOK. Round-filling tickets have a median around 100,000 kroner, the larger tickets around 1 million.
- Angels writing 2 to 5 MNOK or more are a small minority. Roughly one in six can anchor or lead a round.
- Most can take an active or a passive role depending on the company, and about one in five require a board seat.
- Fewer than a third have capacity to follow on, so expect to find new core investors for each round.
- Most offer something besides money, most often technology and product, then operating experience as a founder or through an exit, then commercial and go-to-market, then finance and fundraising.
The lead needs to explain the investment to the other angels without you in the room. Give them written material they can use on its own, and adapt your preparation to the stage of your raise.
- First raise. Reference calls matter most, because you have no investor history of your own. Ask the founder whose company failed how the angel behaved when the news was bad.
- No lead yet. Ask each angel first whether they can lead; one who cannot can usually name one who can. Find the lead before you fill the round, because a round of 100,000-kroner tickets has nobody to run it.
- A lead in place. Give the lead a written case that survives without you, and agree with them what each of the others is being asked for and who will be active.
- Second raise. The network-wide figures do not establish who on your cap table can follow on, so ask early which will, and ask the rest for introductions. A new angel’s network is what you are buying; ask what they add that your current investors do not.
To approach NorBAN, submit your company. NorBAN shares it with its investors and runs dealflow sessions where companies present. Each angel makes their own investment decision.
Investors already connected to NorBAN can also bring companies from their own portfolio to the monthly angel mixers, so an angel already on your cap table is your warmest route in. Start building that route while you are not raising.