What does it mean to get angel funded? Is it giving away a %?

When I read about a company getting angel funded, what does it mean?

Is it a company selling a % of their company in exchange for seed money?

Is there any interest involved?

Angel investors are mainly the first investors, that are taking the biggest risk and providing first money (investments are smaller than from venture capitalists).

Angels are typically after the same thing VCs are after: equity in the company. However, usually Angel-lead rounds are smaller because the money is coming from the Angel's personal assets (whereas VCs invest larger amounts of other people's money).

When an Angel invests money in exchange for equity, there is no interest involved. They are banking on growth, success, and ultimately an exit that will return them their original investment + X.

There are exceptions, however. An entrepreneur could choose to raise a debt round from Angel investors, in which case there may be interest involved. It really depends on the deal. Nowadays convertible notes are somewhat popular. This is a form of debt that gives the investor an option to convert the debt into equity, typically at a discount, during a subsequent raise.

Angel investor typically an individual who is very rich and seeking to invest some of his money on innovate projects done by others. If you have any innovating projects you can contact Angel investors with your project proposal. So, that if they likes your project they will invest some amount on your company.

Regarding share percentage. It varies according to country, amount requested, your customers number and many criteria(s). The normal estimated share to the Investor is 8% of life time profits or 25% of first 10-15years of profits. Angel can enjoy profits as well they bear losses too.

Should you have more questions comment here.

On its way to becoming the next Google or IBM, a startup typically receives investment in cash from these sources:

• friends & family - people who have a personal connection to the founders and will put money of that relation, not because they think they'll make a profit
• angels - various professionals who made some money and like to invest in very-early stage startups, mostly for fun, but with the goal of making a profit
• venture capitalists
• private equity firms
• IPO

Other businesses such as your local restaurant often stop at the "friends & family" stage, sometimes adding a loan from a bank (startups don't usually get loans).