My answer to What are the major differences between getting funding from a VC vs. from angel?
Answer by Raad Ahmed:
It is likely to come down to the investor’s personal and professional preferences about where they fall for things like requiring a board seat or offering a larger investment. However, here is a simple cheat sheet for what’s typical characteristics of VCs and Angel Investors. Keep in mind, these are general differences and not necessarily specific to every investor you’ll meet.
- Capable of contributing larger sums—
- A company of investors (not an individual)
- Not usually interested in early startup phase of business
- Prefers board seat
- May be more involved in hefty decision-making
- Far-reaching network capability
- Established portfolio
- Raise funds for investment
- Individual investors
- May be more interested in startups
- Smaller investment amounts
- May be involved or hands-off
- Offer personal funds for investment
Generally, people assume that angels will be a more likely source of investment for startups, and VCs may come in later once the business has a proven track record. However, there are situations where VCs will jump on board with startups if they see true potential. It really just depends on your business and how successful it may be at cornering the market.
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