new version available

Why Haven't YOU Raised Venture Capital Yet?

Download Your FREE Investors Database Trial Version Now with Only Your Name and Email



» Buy Now for only $97 / secure order Purchase includes 1 year free updates!

Find out more | Tell a friend

bookmark us

August 7, 2012

How Angel Investors Differ From Venture Capitalists

Angel investors and venture capitalists are different in several ways. The four most significant differences are: the amount invested; the investor’s professionalism; the owner of the invested funds; and whether the investor becomes a member of the company’s Board of Directors.

==> Click here to raise money from Angel Investors!

The amount invested: venture capitalists (VCs) typically invest larger sums (usually at least $2 million) than angel investors. They also concentrate primarily on companies that have achieved a larger number of operational milestones than the companies that angel investors typically fund. Angel investors typically invest in ventures in earlier growth stages and provide funding of less than $100,000.

The investor’s professionalism: VCs are professional investors who make their living by investing in companies. Angel investors, in contrast, are non-professional investors who often make their living in other ways. Many are successful businesspeople in their own right.

The owner of the invested funds: VCs invest capital that is actually owned by another entity. The funds could come from a corporation, a pension fund or some other source, but they are not owned by the venture capitalists themselves. As a result, VCs are motivated to fund a company by the potential return on investment (ROI). Angel investors, in contrast, invest their own funds. Because of the difference in the ownership of the invested capital, angel investments are not always made simply to achieve a high ROI. Some angels will fund a company because they like the entrepreneur and want to help.

Taking a board seat (or not): Venture capitalists almost always take at least one seat on the company’s Board of Directors. Angel investors may or may not wish to do so.

==> Click here to raise money from Angel Investors!

It’s important to realize that some VCs also act as angel investors. A venture capitalist who is intrigued by a company that is too immature or does not otherwise fit well with the VC firm’s goals may choose to invest in that company using his or her personal funds.



Facebook comments:

Share This Post:  

Try out our Venture Capital Firms
and Angel Investors
database for FREE!

Enter your name and valid e-mail address to download our FREE
investor database trial version, then click the "Get It Now!" button

Your Name:    

Your Email:     

By continuing to use the site, you agree to the use of cookies. more information

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.



Enter your name and valid Primary Email Address below now to download our FREE trial version, then click the "Get It Now!" button to start the downloading.

Your Name: 

Your Email: 

NOTICE: This is a spam-free site. Your email address will never be sold or traded and you may unsubscribe at anytime.

Tip: VCgate gives you access to 4,500+ venture capital and private equity investors worldwide at the touch of a button.