Angel Investors Contribute Mentoring and Money
In many cases, angel investors add as much value from mentoring as they do in actual dollars.
Founders usually provide most of their value as sweat equity. As funds get larger, the amount of non-monetary value they can contribute decreases.
In the earliest rounds of investment, the total capital in the company might only be a few hundred thousand dollars; the legal fees should only be a few thousand dollars. This necessitates clean, simple documentation.
In these early stages , corporate structures and boards are often not well developed. Successful angel investors see this more as an opportunity than a challenge. At the time angels usually invest, it is still easy to improve the structure and board. That is one of the ways angels and early directors often contribute their experience along with their capital.
While it is not possible to be at all precise, many believe the value provided by good angel investors is roughly half cash and half mentoring.
I think the curve looks something very roughly like this: