They fill the gap in start up or early stage financing between 'friends and family'.

Angel Investors

The job of an angel investor is invaluable. They fill the gap in start-up or early stage financing between "friends and family", by providing seed funding and formal venture capital. Humorously, they were once given the acronym FFF – i.e. FRIENDS, FAMILY AND FOOLS. Although it is usually difficult to raise more than a few thousands from friends and family, even the venture capitalist are least interested to make investments. Thus, angel investments is a common second round of financing for high-growth start-ups or early stage companies.