The difference between venture capital and angel investment
1. Investor: Venture capital is a team composed of professional institutions or individuals, which invests with raised funds; Angel investment is an investment made by individuals or small groups with personal idle funds;
2. Investment target: Venture capital mainly invests in early or growing enterprises, which has certain market verification and income. Angel investment mainly invests in dry seeds or start-ups, with only one idea or embryonic form, and has not yet formed a stable business model and income source;
3. Investment amount: The single investment amount of venture capital usually ranges from hundreds of thousands to tens of millions of dollars; The single investment amount of angel investment usually ranges from thousands to hundreds of thousands of dollars;
4. Investment process: VCs generally conduct due diligence/evaluation/negotiation/signing agreements, and then participate in the management and operation of enterprises in the form of equity or convertible bonds, and provide some value-added services; Angel investors will generally conduct simple exchanges and evaluations on entrepreneurs, and then participate in the shareholders' meeting and board of directors of enterprises in the form of equity or convertible bonds, and provide specific guidance and suggestions.
5. Investment motivation: the only purpose of venture capital is to obtain high return on investment; In addition to the economic benefits of investment, angel investment also has some non-economic factors, such as imparting experience for fun/establishing contacts/challenging self-users.
Advantages of venture capital
1, which can solve the financial difficulties of enterprises and help them grow rapidly;
2, can provide value-added services, such as strategic planning/market development/talent introduction;
3, can improve the brand image of enterprises, increase market credibility:
4. There is no repayment pressure, just sharing the income with investors.
Matters needing attention in venture capital.
1. Choose the appropriate investment stage and field, and find the matching venture capital institution or individual according to the individual's development stage and market potential;
2. Prepare business plan and financial report to show personal creativity/business model/income source/competitive advantage and future planning;
3. Understand the operation mode and terms of venture capital, and make clear the investment quota/equity ratio/management mode/exit mode of venture capital.
4. Maintain good communication and trust, establish long-term cooperative relationship with venture capitalists, report the progress and problems in time, and seek guidance and suggestions.
This paper mainly talks about the difference between venture capital and angel investment, and the content is for reference only.