With the advent of new economy, new buzz words are doing the rounds in board rooms across the world. Angel investment and venture capital are the two words that became popular in the last decade or so.
All the businesses, particularly small businesses growing faster than industry rate, need money to branch out in a new field or expand in the existing domain. Loans are available for these purposes, but perceived to be tedious and costly proposition for a new business.
Angel investors are unlike venture capitalists on couple of fronts. Angel investors are usually individual investors (although the trend is changing now to syndication) interested in investing and running some company operations too. Secondly, angel investors limit themselves to lower amounts of investments compared to the investments from venture capitalists. Third difference could lie in experience aspect of the angel investor – an angel investor is someone with money and business experience. Venture capitalist is equipped more with money aspect. A venture capitalist is least interested in company operations. Quite obviously, an angel investor’s expectations on rate of return are more than that of a venture capitalist.