An Angel Investor is a term used to describe an individual or a corporate entity who provides financial backing for small startup businesses or entrepreneurs.  However, most angel investors are normally high net worth individuals who fund early- stage businesses, small startups or entrepreneurs, to acquire an ownership interest in the businesses. Valuation remains one of the challenges faced in valuing startups and the valuation methods used by angel investors is more of an art than a science. The valuator applies the scorecard valuation method by comparing the business under consideration with the performance of other startups in their portfolio. Typically, as a result of the high risks associated with pre-money startups, angel investors value such businesses very low, far below the expectations of the owners, to compensate for the high risks associated with such investments.