Understanding venture capital and angel investors

Section 2 : Angel investors

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Angel investors differ from VCs in that they are individuals who use their own funds to invest in startups, usually at an early stage of development. Their investment amounts tend to be smaller compared to VCs and their involvement is often less formal. Angel investors may provide guidance and mentorship in addition to financial support, helping founders navigate the early challenges of growing a business.

Unlike VCs, angel investors typically take on more risk since they invest in businesses that may not yet be fully established. However, they also expect returns on their investment, though their involvement in day-to-day operations is often less hands-on. Angel investment is a common stepping stone for startups seeking seed funding before approaching venture capitalists for larger investments.

 

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