The role of business angels has been analyzed in the context of the European market, with a particular focus on Republic of Croatia. Although the number of business angels in Croatia is relatively small compared to more developed markets such as the United Kingdom and Germany, trends indicate growth and increased interest in this form of investment. However, additional measures are needed to strengthen this segment, including improving the regulatory framework, encouraging cooperation among business angels, and raising awareness about the importance of venture capital for economic growth. The paper also explores the challenges faced by business angels, such as limited liquidity, high risk of project failure, and the need for detailed due diligence before investing. Despite these challenges, business angels have proven to be vital players in the venture capital ecosystem, contributing not only to financing but also to the overall development of the entrepreneurial environment. Business angels represent an indispensable source of financing and support for start-ups and young companies. Their importance in the venture capital market is growing, and their ability to recognize and support innovative ideas makes them a key factor in stimulating economic growth and development. To fully leverage the potential of business angels, it is essential to continuously work on improving the business environment and encouraging investments in venture capital.