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What is the difference between Venture Capital and Angel Investors?


What is the difference between Venture Capital and Angel Investors?

Typically, angel investors provide 'seed' financing, usually in amounts below say $200K. They are often private individuals who may affiliate in a network. They help people get started with the initial idea and prototype for a product. Angel level investors may get interested in helping small traditional business get started as well as hot tech companies.

Venture Capital is usually a larger investment, in the several million $ range, made by a VC firm or fund. It's a more formally structured process and the VC firm typically has a standard procedure for reviewing deals, taking equity positions, and managing investments by providing expertise on the board of directors. VC firms look for high risk, high leverage, fast growth companies that will pay off 10x or 100x on the investment.

a think a venture capital is when you invest your capital joint with otherin something that already exists, and an investor angel is when an investor comes and sees your proyect and he will invest in it

My understanding is that VC companies are like a bank. They lend, advise and then get out when there is a profit. Angels are more like partners and ae less concerned about making a profit,

VC's will generally want equity in the company, and more than likely control (or at least strong representation) of the board of directors. They will typically look for minium 20% returns, and they will want those returns quickly. They will also invest across all stages of the company, from start up to later stage Mezz. debt and equity financing.

Angel investors will generaly want less control, and will be more patient regarding the rate of return on their investment. Other criteria are likely to be the same as a VC investor. They are typically start-up company investors.

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  Business financing   Business Invest   Business Debt   Bond Investment   Angel Funds   Alternative Investment
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