When I was in my college days studying management education, I used to think that Angel Investors and Venture Capitalists are two different bit of jargon thrown at you at different times to mean the same thing. Now that I am a management graduate, I understand that I was naïve to think that as there are certain fundamental differences which I am about to explain in the passage below.
I am going to break it down to you with the help of the following 2 simple examples:
Let’s say that your rich friend agrees to loan you an amount to help you get yourself a business up and running and you promise them that you will not only return them the amount back but you will pay them something more as a reward of their trust over you. If it fails then your friend loses money just as you lose your business. That the concept here.
1. Individual high net worth investors with personal net worth more than $ 1 million
2. They will generally put in their money when the idea has been converted to at least prototype or is in a beta phase
3. They generally agree to finance anywhere between $25,000 to $100,000
4. The due diligence done by angel investors can range from a basic background check to thorough research
5. They have higher risk as compared to VCs as there is a higher …