So your startup is thriving and bursting at the seams. Congrats. You’ve decided you’re ready to seek funding. While this article certainly won’t tell you everything you need to know about funding, it’ll teach you the differences between angel investors and venture capitalists. It’s up to you to decide which is right for you.
Angel investors are private individuals looking for a strong, high growth investment. They want a better return than they’d get in a normal investment, so expect them to take 5-25% stake in your company. Funding varies, but tends to be on the smaller side.
Pros: Angels are often entrepreneurs interested in helping you get somewhere with your business. They can be great mentors as they’ve got the experience you need to succeed. If you want some advice, they’re ideal for that. And angel investors usually have great contacts, which can also be a boon for your startup. If your startup is still in the development phase (no product yet), angels may be more attracted to your business than VCs. Business deals tend to be more negotiable with angel investors.