Angel Funding or Venture Capital

There are numerous differences between Angel Funding and Venture Capital.  These are some those differences:

The Amount Invested

Angel Investment can come in various sizes, but it is generally on the small side and gives investment for small ventures that are just beginning.  A majority of Venture Capitalists, however, will usually invest a minimum of two million dollars.  They would much rather see a forty percent return on that two million dollar amount much more so than a one hundred percent return on 50k.  Venture Capitalists also possess more money than Angel Investors for investment purposes because venture capitalists are generally members of groups that have huge amounts of funds.  However, Angel Investors can be wise and on their own looking for opportunities to invest their money.

Professional versus Nonprofessional

Venture capitalists generally are members of a firm and the criteria for getting a job at such firms is extremely high.  Thus, Venture Capitalists are professional investors that have to go through tough requirements just to be hired with a venture capitalist firm.  This is not putting Angel Investors down in terms of being professional, since many of them are clearly very professional indeed.  However, a Venture Capitalist is hired to locate investments, whereas an Angel Investor is not.  An Angel Investor might own a business in a totally different niche and is just looking for some place to invest some of their money for a potential gain on their investment.

Click here to learn more about Angel Funding <==== Someone Else's Money versus Personal Money During most cases, Venture Capitalists are basically fund managers who are probably more willing to take risky chances on investments.  But let it be known that most of the money that Venture Capitalists use comes from sources such as pension funds, corporations, wealthy families and rich people.  But, the money invested by Angel Investors is usually earned and pulled from savings over a longer period of time.  Angel Investors do not have a set policy for investing money such as a particular level of return.  They are able to invest as much as their pockets will allow into businesses that might not have high returns, but can help the community in some form or another. Board Seats Board seats are the name of the game with Venture Capitalists.  It is a given that they will demand a seat on your board if they invest money into your company.  They are very involved with the companies in which they invest in.  Angel Investors might want to be a part of your company if they think they can make a difference in some sort of way.  But, Angel Investors will not demand a seat on your board in return.

Leave a Comment

Your email address will not be published. Required fields are marked *

By using this website you agree with our cookie policy

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.