Business Angel

A business angel is a private investor — typically a successful entrepreneur, experienced executive or former business owner — who invests their own capital in startups or early-stage SMEs in exchange for a minority equity stake. Beyond the financial contribution, a business angel typically brings their network, sector expertise and entrepreneurial experience to the financed company — distinguishing them from a purely passive investor.

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A business angel's investment ticket typically ranges from CHF 50,000 to CHF 500,000 per transaction, for pre-money valuations between CHF 500,000 and CHF 3.0 million. They intervene upstream of venture capital funds, often at seed or pre-seed stage, when the company does not yet have the revenues or traction required to attract an institutional fund.

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From a tax perspective, business angel investments benefit from incentive regimes in several countries. In France, the 25% income tax reduction on the invested amount has supported the development of this investor category. In Switzerland, there is no direct fiscal equivalent, but capital gains realised on the sale of private wealth holdings are exempt — a strong implicit incentive.

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Example: a Zurich-based business angel invests CHF 150,000 for 8% of a Swiss deeptech startup valued at CHF 1.875 million pre-money. He co-invests alongside two other business angels for a total seed round of CHF 350,000. Four years later, the startup raises a Series A at CHF 12.0 million post-money EV — generating a 6.4x multiple on the initial investment.

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At Hectelion, we conduct valuations of early-stage and development-phase startups, mobilising methods adapted to non-linear growth companies.