| I have received the question: What is the Difference | | | | only a couple other angels for a deal. Angels will also |
| Between an Angel Investor or Venture Capital | | | | have significantly less capital to commit to the |
| Database? The answer has more to do with the | | | | business, which also is a reflection of the risk |
| differences between the two industries than it has to | | | | associated with the investment because it is a lone |
| do with differences between the actual databases. | | | | investor in the company and not a group of investors |
| In this article I answer this question by explaining | | | | committing capital at a shared risk but one that is |
| what makes a venture capital firm different from an | | | | spread among the investors and not limited to a |
| angel investor. | | | | single investor. |
| - Size of investment: An angel investor invests | | | | - Investor profession: an angel will often either be |
| significantly less than a venture capital firm on | | | | retired or only investing on a part-time basis. Often |
| average. This reflects the size of the business as | | | | the angel is a retired entrepreneur or venture |
| well. A smaller business or start-up will require far | | | | capitalist. Venture capitalists on the other hand are |
| less capital to expand than a midsized company or | | | | professional investors and typically risking the money |
| growth company like those that venture capitalists | | | | of the limited partners, although they may put their |
| typically invest in. | | | | own money in the fund too to show that they have |
| - Size of the fund: A venture capital fund will | | | | some "skin in the game". |
| typically have more capital in the fund, pooled from | | | | The differences between angels and venture capital |
| VC limited partners. This allows for larger | | | | funds should illustrate the difference between |
| investments and more businesses it can invest in. | | | | databases of each investor group. |
| An angel investor may invest alone or partner with | | | | |