The difference between VCs and Angels

Sun Jan 27, 2013

Many people I've spoken with were confused in the difference between VC & Angel on who they should seek for investment. Lets take this post to clear up the difference.

Angels are the ones who normally invest a small chunk, roughly 25k USD per angel for 4% of the startup during its idea / early stage. The Angels are the "validation stamp" for your idea in conjunction to play the role of advising, and bring your startup to seed ready. It is also important to note that startups should find Angels who are experts in your startup's area, due to their values and networks are capable to help you penetrate your initial market entry. At this stage, the value of an Angel are more important then the money they put in. Another note Angels normally look for a 10x return.

VCs normally enter when your startup is revenue generating or seed ready, and they will be the one to help your startup to grow up into an adult in a short period of time. When a VC invests, startups will have a new boss, as if they were married to them. VC will always try to run your startup like a business so there are pros and cons with them joining in.