Which term describes a wealthy individual who directly invests in a new venture in return for equity?

The term that describes a wealthy individual who directly invests in a new venture in return for equity is "angel investor." Angel investors are typically affluent individuals who provide capital to startups or entrepreneurs, often in exchange for convertible debt or ownership equity. They play a crucial role in the early stages of a business, not only by providing necessary funds but also by offering mentorship and guidance based on their own business experiences.

In contrast, venture capitalists usually manage funds from numerous investors and invest larger sums of money in ventures, often at a later stage in development than angel investors. Corporate investors typically invest on behalf of their companies and may seek strategic benefits along with returns. An equity partner generally refers to an individual who holds shares in a business and is typically involved in its operational aspects, often in more established companies rather than startups. Angel investors differentiate themselves by providing resources to new ventures that may not yet be attractive to larger institutional investors.