How Is Angel Investor Different From Venture Capitalist?

How Is Angel Investor Different From Venture Capitalist?

1 Answer

  1. Angel investors are wealthy individuals who invest their own money into start-up companies, generally using money pooled from investment companies, large corporations, and pension funds. They are small business owners, family and friends. Venture capitalists are employees of venture capital firms that invest other people’s money, which they hold in a fund, into other companies. These tend to invest in businesses that are already established in order to reduce their risk of losing investments. Small business angel investors, those who are from family and friends, focus more on helping raise someone’s business than profiting right away. This results in their terms be more reasonable than a venture capitalist’s terms. There’s a lump-sum difference in the amount of business capital both investors are willing to offer. It has been noticed that VCs invest more money into businesses than angel investors and hence venture capitalists expect a higher percentage in return. Venture capitalists might have a desire that you establish a Board of Directors and give them a seat on it after investing while angel investors act as mentors.

    • 0

Leave an answer

You must login to add an answer.