A 'Business Angel' is typically a high net worth individual who invests on his own, or as part of a syndicate, in businesses where there exits an opportunity to make a return on his capital. Business Angels operate in the SME sector - small to medium sized enterprises or businesses with turnover from zero to £20 million.
They are frequently entrepreneurs or executives, who primarily invest for financial reasons, however other reasons for wanting to invest include wanting to keep abreast of current developments in a particular business arena, mentoring another generation of entrepreneurs and making use of their experience and networks on a part time basis.
Therefore, in addition to funds, angel investors can often provide valuable management advice and important contacts. This is particularly relevant in the so called turnaround market, where additional experience and management expertise can be as important as the capital required for the business.
Finally, some terminology. Business Angels, Private Investors, Dragons, Investment Entrepreneurs are basically all one and the same. All seek opportunities to invest in businesses, putting their own into the business in return for shares.