Difference Between Angel Investor And Venture Capitalist

Difference Between Angel Investor And Venture Capitalist

In order to run your business investment is an essential requirement,
there are various for financial assistance but they are considered a loan,
not investment, but there are major types of investor Angel Investor and
Venture Capitalist, but the main task is to select the investor who is suitable for
your investment before knowing that we need to be able to identify the
“Difference Between Angel Investor And Venture Capitalist”.

So, before understanding the Difference Between Angel Investor And Venture Capitalist,
Let us understand the meaning of Angel investor and Venture Capitalist.

Angel Investor:

An angel investor is an investor who is also identified as a seed investor,
he is an individual with a lumpsum-financial income, who usually invests in small scale start-ups,
and ambitious entrepreneurs to earn a higher rate of return or for the sake of ownership in the company.

Venture Capitalist:

Venture Capitalist is an investor, who provides Capital assistance to the companies,
that are in need of financial assistance for the growth of their company.
Usually, Venture Capitalist invest in those company that is willing to provide the
there part of ownership in their equity as a return.
This type of investor focus on both risk and return factor, they invest in the company
assuming the higher return and are even ready to risk their investment.

Now we know the meaning of the Angel Investor And Venture Capitalist,
let us understand the difference between them both.

Difference Between Angel Investor And Venture Capitalist

Nature

Angel Investor

Venture Capitalist

TypeIndividual InvestorCompany or A firm
Investment valueUp to 1 MillionMay be Over 1 million
ProfessionHas an additional JobFull-Time Professional
OwnershipDoesn’t Expect ownership in exchange for the investmentLooks for ownership in exchange for its investment
Return Expectation15-25% on the investment25-35% on the investment
DurationUsually invests for longer DurationDepends upon the return and relation.
InvolvementDoesn’t involve in the processInvolves in almost daily activities
IntentionHelps you to bring the product into the marketHelps you to go public

 

Now we know the Difference Between Angel Investor And Venture Capitalist,
let us identify which is better?

Which is the better Angel Investor or Venture Capitalist?

Hence we the comparison between the both it is easier to identify
the suitable form of investor for your business.

Well, taking into consideration of the above difference we cannot just judge,
both of the investment technics are great, but we need to differentiate on the basis
of the requirement for your business.

Let’s say, If you are looking for an investor, that provides you the funding,
but does not interfere with your routine work and you don’t want to provide
a share of your company then the best suitable investor for ou company is
Angel Investor.

On the other hand, there is a Venture capitalist who not only invests in your company
but also wants to own a part of your company as safety in exchange for his investment.
it good in the case, wherein the risk is higher and the owner alone can not bear the losses,
so, the venture company doesn’t always for the long run, you can always opt for a Venture capitalist.

Conclusion:

In summary, for the topic “Difference Between Angel Investor And Venture Capitalist”,
besides, we can conclude by saying that both are equally important and the investor is playing
their part as per their requirement, furthermore importantly it the Entrepreneur’s role to identify
the requirement for his business.

Also for Furthermore details:

[ Read More: Venture Capital: Types and Benefits ]

 

[ Read More: Credit Card: What Is FDI? And Its Benefits ]

About the author

BFSI 18

Leave a Comment