Startups do not grow with money alone: the role of Angel Investors in innovation

Innovation is often romanticized as the exclusive product of creative ideas, but the reality of new business development shows that it equally depends on consistent execution, rigorous testing, continuous adjustments, adequate time, a qualified team, and strategic capital. Therefore, the angel investor plays a far more comprehensive role than just providing funding, acting as a growth catalyst by offering practical experience, strategic guidance, and valuable connections that accelerate the transformation of a startup into a scalable and sustainable business.

Angel investment is, above all, a vector of cultural transformation. Contrary to what many believe, it is not just an alternative way for early-stage startups to raise funds. It is one of the few ways to accelerate innovative businesses with practical intelligence, market sensitivity, and a network of connections that no pitch deck can deliver on its own.

The concept of smart money encapsulates this dynamic. Beyond the capital injection, it involves the accumulated experience of professionals who have already faced crises, pivots, mergers, and sale processes. This type of investor assumes a position close to an active board, providing guidance in areas such as growth, marketing, product management, go-to-market and strategy, enabling startups to think like large companies even in their early stages.

According to studies by the Organisation for Economic Co-operation and Development (OECD), startups supported by angel investors exhibit faster growth, higher survival rates, and greater economic relevance compared to those that receive only traditional capital. The OECD even recommends that governments, universities, and companies encourage this investment model as a way to accelerate innovation and generate value for the economy.

The volume invested by angel investors in 2023 recorded a 10% drop compared to 2022, with R$ 886 million invested in startups throughout the year. On the other hand, the number of investors grew by 2.4% in the same period, from 7,963 to 8,155, according to a survey conducted by Anjos do Brasil. These numbers reinforce that, although the total amount has decreased, the ecosystem continues to expand and mature.

During an interview with Inovatalks, Cássio Spina, founder of Anjos do Brasil, highlights that the most appropriate time for angel investor involvement does not occur at the absolute initial stage, when the idea is still being validated, nor in more mature phases, when the company is already consolidated. According to him, the participation is usually decisive when the startup has already tested the product, has ongoing operations, and needs resources to structure the team, invest in marketing, and launch in the market.

This transition, from prototype to commercial scale, is marked by strategic uncertainties, in which the practical experience of those who have already faced similar challenges becomes decisive. In Brazil, organizations such as Anjos do Brasil itself play a relevant role in structuring investor communities, sharing intelligence, and connecting entrepreneurs with qualified support networks. Collective action strengthens the dissemination of best practices and enhances the capacity to select businesses with impact potential.

Angel investment, therefore, simultaneously contributes to the evolution of startups and the transformation of the investors' own mindset. By participating in organized investment groups, they dilute risks, increase their chances of return, and also expose themselves to new business models, learning about emerging trends and becoming active agents of continuous innovation. In this way, angel investment consolidates itself as a strategic mechanism capable of generating economic, cultural, and technological impact, promoting the simultaneous evolution of entrepreneurs, investors, and innovation ecosystems.

*By Rico Araujo, CEO of PX/Brasil, Innovation Advisor and Angel Investor*. A specialist in developing projects that integrate marketing and strategic innovation to transform brands into highly competitive businesses, Rico Araujo is CEO of PX/Brasil and an Innovation Advisor. Access InovaTalks via the link: https://inovatalks.com.br