Lately, I’ve seen many conversations on how to raise early funds for your startup. If you have at the very least a working prototype, and have exhausted your friends and family network, you might consider moving on to the possibility of an angel investor.
What is an angel investor?
Angel investors are focused on helping startups take their first steps, but they are not philanthropists. They will only put their money where they feel confident that the business will be successful.
What’s the difference between an angel and a VC?
Angels usually invest small amounts at a very early stage. They’re not looking for a 20x return on their investment like venture capitalists, or VCs, are often keen to see. VCs, however, are taking much bigger bets on behalf of their Limited Partners (or LPs). As a result they are looking for much higher returns, with the risk spread across a larger group of people or institutions.