2/25/2021 Tip: How Angel Investors Differ from Venture Capitalists

Today’s Quote

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.”
~ Eleanor Roosevelt

 

Today’s Tip

Venture capitalists differ from angel investors in that they typically provide more money (generally at least $2 million) and focus on companies that have achieved more operational milestones than companies generally funded by angel investors.

Other key differences include the following:

  • Professional vs. non-professional investors: venture capitalists are professional investors. That is what they do for a living. Angel investors do not invest for a living. They often have other jobs or commitments to attend to.
  • Other people’s money vs. own money: Venture capitalists invest other people’s money in ventures. This money comes from pension funds, corporations and other sources. Conversely, angels invest their own money. As a result, angel investments are not always based on the potential return on investment (ROI) of the deal (the primary concern of venture capitalists) but may result from other factors such as simply liking the entrepreneur and wanting to help them out.
  • Board seat vs. no board seat: Angel investors may or may not want a seat on the company’s Board of Directors. For venture capitalists, taking a Board seat is the norm.

 

Today’s Resource

How to Attract Angel Investors in 2021

Angel Funding is the #1 type of funding I recommend to entrepreneurs (no matter what type of business you’re in).

And you’ll raise angel funding so much faster and easier when you follow my proven, step-by-step formula.

Learn more and get started <–

 

Trivia 

Today’s Question: Pharmaceutical giant Johnson & Johnson issued a nationwide recall of what well-known pain reliever after 7 people died from taking pills which had been tampered with on store shelves?

Previous Question: What highly successful Internet shopping website launched in 1995, but didn’t become profitable until 2003?

Answer: Amazon.com

The web was still in its infancy when Amazon was first launched, and many people were skeptical about making purchases online at first. The company held fast, and the idea soon caught on. By 2008, Amazon reached over $19 billion in annual revenue and reported more than 615 million visitors to its website.

The lesson here is about patience, especially if your business model revolves around a relatively new technology. Many consumers are cautious by nature, and it may take some time for your product or service to catch on.

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