We were talking about angel investment in a meeting this week and this was one of the questions that came up.

If an angel invests £25,000 or £50,000 into a startup in return for equity, does that money ever actually get "paid back", or is their return entirely dependent on dividends, a future funding round or eventually selling their shares?

Interested to hear how this works in practice from founders and investors who have been through it.

If it's an equity investment, it's not normally like a loan where you pay them back every month.

They own a percentage of the company. Their return depends on what happens to that investment later, like a sale or other liquidity event.

Hope this answer helps.

This was confusing to me at first too. “Investment” sounds like money you eventually return, but equity is different.

If the company never has an exit or distributes dividends, there isn't necessarily a point where the investor just gets their original £25k back.