While they mainly operate during the early stages of business development, most business angels active on the continent adopt a cautious approach and engage in partnerships with other players in the entrepreneurial ecosystem, such as venture capital firms and tech hubs.

Around 64% of active business angels in Africa make investments of less than $25,000 per transaction, according to a December 2024 report by the African Business Angel Network (ABAN), in collaboration with the Briter Bridges research firm and the African Angel Academy.

The report, titled "ABAN Angel Investment Survey 2024," is based on a survey of 110 business angels from more than 30 countries, 38% of whom are women. Business angels—often entrepreneurs, senior executives, or investment professionals—are cautious when investing their own funds, especially during times of economic uncertainty. Between 2022 and 2024, the share of business angels making investments below $25,000 rose to 77%. Smaller investments allow for greater diversification, with less risk, as most of these investors focus on early-stage fundraising, such as pre-seed and seed rounds.

African business angels also take various approaches depending on their risk tolerance and investment goals. Half of the respondents prefer equity investments through Simple Agreements for Future Equity (SAFE), which are used by risk-tolerant investors seeking high long-term returns.

Meanwhile, 28% favor debt instruments, such as convertible bonds or loans, which provide returns over shorter periods. These options appeal to more risk-averse investors who seek quicker profits while still considering equity in high-growth companies.

When it comes to the type of businesses they target, 43% of business angels prefer investing in high-growth companies, such as innovative startups founded by entrepreneurs aged 25 to 40. Moreover, 50% express a strong preference for businesses that already have a customer base or are generating revenue, even if they are not yet profitable. Many business angels also favor companies operating in urban areas (90%) and those with strong female representation, whether as co-founders, leaders, employees, partners, or customers (79%).

The report also reveals that 46% of these investors choose to invest through structured vehicles, such as angel syndicates. This approach allows them to share risks, pool expertise, and gain better access to investment opportunities. Meanwhile, 26% invest independently, while 28% prefer flexible strategies that combine both individual and group investments.

Business angels often partner with other types of investors and various players in the entrepreneurial ecosystem, including venture capital firms (22%), tech hubs (14%), entrepreneurs (13%), international donors (9%), and governments (8%). They also adopt strategies aimed at increasing their chances of success, such as joining angel networks (57%) or attending training sessions offered by the African Angel Academy (47%).

While they primarily fill funding gaps for early-stage companies, which are often less appealing to risk-averse investors due to their untested models, business angels typically provide more than just financial support. According to the report, 93% of respondents offer at least one type of high-value support to entrepreneurs, including business advice (29%), mentorship (26%), help with networking (25%), and guidance on improving governance (13%). Furthermore, 6% of business angels make follow-on investments in companies already in their portfolios, based on strong growth, trust in the management team, or positive market trends.