When it comes to getting funds for your start-up, it is important to know that investment comes in various shapes. Here look at the difference between venture capital investment and angel investment:
Angel investor is a person who put his money into the growth of a small start-up business, also possibly contributing their advice and experience. Angel investors might be wealthy individuals who have taken a personal liking to a product, a family member or a friend, or a group of angels investors who come together to finance start-ups.
Venture capital normally involves a whole company firm – board members, investors, and individuals whose job is to help a business develop. Venture capital companies are made of professional investors.
Key Differences between the two
Angel investors put in a variety of amounts. They can invest a small amount of money or might go as high as £1 million. On the other hand, VC firms are unlikely to put in less than £1 million.
Angel’s investors invest in early-stage businesses while venture capitalists firms are generally unwilling to invest early-stage business unless they demonstrate compelling promise and high growth potential.
Although angel investors might have some valuable advice for you, they do not have a seat on your board. On the other hand, venture capitalists have a say in how a business is run.