Skip to content

CS Executive · Setting Up of Business, Industrial and Labour Laws · Startups and its Registration

Meera's DPIIT-recognised startup is a private limited company. She wants to invest in it through an angel investor route. Which feature best describes an angel investor?

An angel investor is a high-net-worth individual who invests personal funds in early-stage startups, usually for equity or convertible instruments, and often offers mentoring and contacts. Unlike a bank lender, an angel takes ownership risk, and unlike an exchange or regulator, it provides capital directly.

  1. AA high-net-worth individual who invests personal funds in early-stage startups, often giving mentoringCorrect
  2. BA bank that gives secured working capital against stock
  3. CA stock exchange that lists the startup's shares
  4. DA regulator that approves the startup's name

Explanation

An angel investor is typically an affluent individual who invests own money in early-stage ventures in exchange for equity or convertible instruments, often also guiding the founders. A bank lending against stock is a lender, not an angel. Exchanges and name approvers play no investing role.

Did you get it right without looking?

One question tells you little. A timed set on Startups and its Registration shows your real accuracy, how long you take and where you lose marks.

Practise Startups and its RegistrationFree diagnostic mock

More Startups and its Registration questions