Difference between Angel Investors and Venture Capitalists

Angel investors commonly offer seed capital to entrepreneurs by investing in early-stage companies.

Venture capitalists, on the other hand, frequently invest in later-stage enterprises that have already showed significant growth potential.

Angel investors usually take a hands-off approach and are not involved in the day to day operations of the company.

Venture capitalists frequently offer strategic and operational help to the management of the enterprises in which they invest.

Angel investors are a great source of industry experience and contacts. Most of them have been there and done that and are more than happy to share their wisdom with the companies they invest in.

Venture capitalists is a wider view portfolio, might provide more structured growth strategies and connections within their industry focus.

Angel investors are high-net-worth individuals that invest their own money.

Venture capitalists manage capital for wealthy people or larger investors and invest it.

Angel investors’ investment requirements may be more flexible in terms.

Venture capitalists’ criteria are more severe and require companies to reach particular milestones and benchmarks.

Angel investors have high risk tolerance, because they’re investing their own personal funds, are generally much more comfortable taking a leap.

Venture capitalists, however, are investing other people’s money. They need to be much more calculated and strategic in their approach.

Angel investors typically have a more diversified portfolio.

Venture capitalists hold a concentrated portfolio aimed at a particular industry or sector.

Mark Cuban, known for Shark Tank, has invested in early-stage companies like Uber and Blade. Other names like Peter Thiel, Marc Andreessen and Ron Conway.

Sequoia Capital, a VC firm, has been an early investor in tech giants like Apple and Google. Other VCs like Andreessen Horowitz, Kleiner Perkins Caufield & Byers, and NEA.