“High net worth individuals who invest in seed or “angel” rounds are typically called Angel Investors as they provide advice, connections and other resources in addition to their capital investment. Currently there is no incentive for angels to deploy their capital in to this asset class, and there is no mechanism to support them should the startup fail.
In the UK, the Enterprise Investment Scheme provides a 30% tax offset of Angel investment in early stage venture and provides the remaining 70% as a tax deduction should the venture fail. This is one of the leading contributors to the increase in angel investment in the UK. In Israel, the Chief Scientist has tabled a 100% tax offset for Angel investment with no ceiling on investment.”