Establishing a business is the dream of millions of potential entrepreneurs. However, to make it happen, you will need funding. There are two ways to acquire funding:
- Angel investors
- Venture capitalist
Although both are good for start-up firms, there are certain subtle differences between the two, which you must consider before approaching.
Primary concept
Angel investors are the people with strong financial resources who are ready to invest their funds in the companies.
But the venture capitalists are the employees working under risk capital companies who are investing the money of other people in the companies.
Difference #1: Nature of operation
As you can well understand, venture capitalists will be channelizing others’ funds. So, they will have more dependent while funding rather than the angel investors who operate independently, and thus, they have more flexibility about funding.
Another option is equity funding, but it will also bring about a certain level of dependency in terms of administrative decisions depending on the stakes of the shareholders.
Difference #2: Amount of funding
Angel investors usually invest typically between $25,000 and $1,00,000. Of course, some can invest more or lesser than this bracket. But when angles join a group, the amount can be above $7,50,000.
But the average investment from the company of the venture capitalist will be not less than $7 million. Therefore, if you have bigger plans in mind and you need strong funding, venture capitalists can be the better option.
Difference #3: The way of support
Angle investors will offer complete financial assistance but usually, nothing more. But when you consult with us at Kansaltancy Ventures, you will come across many venture capitalists who are ready to seek a competitive product or service in the market.
• Such capitalists have a strong management team to support the process of establishing the business.
• They already have the marketing potential to get you the initial level of attention.
Needless to say, they will be more effective than equity funding for start-ups.
Difference #4: Power division
You should predict that venture capitalist can crush your company anytime as they often take the seat of the board of directors for your firm. But the angels don’t pose much threat to the company.
Now it is our job at Kansaltancy Ventures to assess your tats, and your business pans and suggest the most suitable funding option from ur side.