From a narrow point of view, the main difference among Angel Investment, VC(Venture Capital) and PE(Private Equity) lies in the different stages of investment intervention.

(1) angel investment mainly invests in early-stage startups;

(2)VC invests in medium-term high-speed development-oriented startups;

(3)PE is involved in mature enterprises that are about to be listed or merged.

It can be said that VC receives the offer of angel investment, PE receives the offer of VC, and IPO (listing) receives the offer of PE.

Different investment stages determine their different characteristics as follows:

1. Investment strategy

(1) Angel investment mainly depends on people, and the founder largely determines the quality of the project. Early projects are often just an idea, and it is impossible to test the accuracy of business model completely by actual operation. Angel investors can only judge according to the reliability of the founder and the understanding of the industry. I often hear an angel investment tycoon talk with entrepreneurs for three hours, and finally strike the table and say, "You are reliable, I voted for this project!" " Although it is exaggerated, "knowing people" is indeed a very important consideration for angel investors when making decisions.

The amount of angel investment generally ranges from several hundred thousand to several million, and the specific amount needs to be invested in proportion according to the project valuation negotiated by both investors and founders.

(2)VC investment needs to comprehensively consider the founding team and business data of the project. Since the VC stage project has been in operation for a period of time after the angel investment, the business model can be partially verified through the operating data. At this time, VC investors will make the final investment decision based on the comprehensive consideration of industry analysis, competitive advantages and barriers, founding team collocation, business data, industry upstream and downstream, etc.

the investment amount ranges from one million to hundreds of millions of yuan.

(3)PE investment is oriented to mature enterprises and mature markets, which requires higher industry resources of investors. In terms of investment strategy, companies with listing potential or the possibility of merger and acquisition are often found according to industry analysis. After successful investment, with the help of PE company's resource advantages, support the invested enterprises to go public or be acquired, realize exit and get high returns.

the amount of investment starts at tens of millions, and at most it is billions.

2. Sources of funds

At first, angel investment was a group of high-net-worth people, such as Xu Xiaoping, Lei Jun and Cai Wensheng, who were active in the industry for a long time. Driven by the atmosphere of "mass entrepreneurship and innovation" in recent years, a large number of angel investment funds have emerged, and the market is gradually improving. Gradually, there are also large VC and PE funds involved in the angel investment stage.

VC and PE have developed for a long time and have rich sources of funds, including high-net-worth individuals, professional venture funds, leveraged M&A funds, strategic investors, pension funds and insurance companies.

The operation mode of domestic universal funds is a partnership system, which consists of GP and LP. GP(General Partner) is responsible for fund operation and investment decision-making to earn management fees and a small part of income, while LP(Limited Partner), as the investor, does not participate in fund management decision-making, but enjoys most of the income of the fund.

3. Risk and reward

Angel investment is undoubtedly the highest "single project return". The valuation of early projects is low, and once the project becomes a unicorn, the return of 1 times and 1 times can be realized completely. In the case of the first edition, if the project does not have a return of 5 times or 1 times, it is embarrassing to take it out and tell the peers. But the corresponding risk is also very high. For example, angel investors invest in 1 projects a year, and 9 of them lose all their money, and only rely on the successful project to make up for the losses of 9 projects. This situation also happens from time to time.

VC and PE investment As the company's valuation continues to rise, the lower the return multiple of a single project, the higher the probability of relative investment success than angel investment.

PS: Let's talk about their similarities again. From a broad perspective, angel investment, VC and PE all belong to Private Equity)

The "Private" here has two meanings:

(1) The way to prepare funds must be non-public. Because the risk of private equity investment is quite large, and the capital payback period is very long, it has very high requirements for investors' financial strength and risk tolerance, so it cannot be raised publicly for ordinary people.

(2) The underlying assets of the investment are non-public company shares, and through the rapid growth of the underlying company, it earns high returns on equity appreciation.

from the perspective of the whole financial market, private equity investment is only a form of "Alternative Investment" and can also be understood as non-mainstream investment. According to the & of the Securities Investment Fund Association, by the end of April 217, there were more than 21, private equity in China. Venture capital funds, with a total scale of over 5.5 trillion. According to the investment data, in 216, private equity investment exceeded 68 billion. In fact, the proportion of private equity investment in the whole financial market is still very small.

Extended information:

1. Venture Capital (VC in English) is called venture capital for short, and also translated as venture capital, which is mainly a financing method to provide financial support to start-ups and obtain shares in the company. Venture capital is a form of private equity investment. Venture capital company is a professional investment company, which is composed of a group of people with knowledge and experience related to science, technology and finance, and provides funds to those who need funds by directly investing in the equity of the invested company (the invested company).

most of the funds of venture capital companies are used to invest in new ventures or unlisted enterprises (although the use of funds has been greatly relaxed in current laws and regulations), and the purpose is not to operate the invested company, but only to provide funds and professional knowledge and experience to help the invested company obtain greater profits, so it is a high-risk and high-reward enterprise that pursues long-term profits.

2. Price earning ratio (P/E ratio) is also called "cost-earnings ratio", "stock price-earnings ratio" or "market price-earnings ratio (P/E ratio for short)". P/E ratio is one of the most commonly used indicators to evaluate whether the stock price level is reasonable, which is obtained by dividing the stock price by the annual earnings per share (the same result can be obtained by dividing the company's market value by the annual profit attributable to shareholders).

when calculating, the stock price usually takes the latest closing price, while the EPS is called historical P/E if it is calculated according to the published EPS of the previous year; Generally, consensus estimates are used to calculate the estimated P/E ratio, that is, the estimated average or median obtained by the institutions that track the company's performance and collect the forecasts of many analysts. There is no certain criterion for what is a reasonable price-earnings ratio.

3. Angel investment is a form of equity capital investment. The word originated from Broadway in new york and was first used in the United States in 1978. Refers to people with certain net wealth who make early direct investment in high-risk start-ups with great development potential. It is a spontaneous and decentralized private investment method. These investors are called "investment angels". Capital used for investment is called "angel capital". ?

angel investment is a form of venture capital, which is based on the investment amount of angel investors and the comprehensive resources that the invested enterprise may provide.

reference: Baidu Encyclopedia-venture capital entry

reference: Baidu Encyclopedia -PE entry

reference: Baidu Encyclopedia-angel investment.