Question

Determine which is a better fit for you at this stage of your venture - an Angel investor or a Venture Capitalist. Respond to the following:

I have a property rental business that I have 3 rental properties for 8 years

Evaluate your need for an Angel investor or a Venture Capitalist.

Explain why the Angel or the VC would be a fit for you and your venture.

Assess the reality of using an Angel or a VC at this stage of your venture.

Answer 1

Angel investors can often take on role of a mentor/advisor than VCs, and it is pretty common for them to make investment via a convertible debt instrument, allowing for expensive valuations and other equity-based legal/accounting due diligence to be put off until future rounds.Venture capital is usually a little more structured, or institutional, and the one-on-one mentoring is less common. VC investors want to invest in management teams who are open to advice but have experience and connections of their own upon which to rely.

It depends on the stage of your business, how much money you need to raise and the terms that you are hoping to secure. Venture capital is usually not available to pre-revenue or very low revenue businesses or in amounts lower than $2 to $3 million. As a result, if you are very early stage or need a smaller amount of cash, venture capital investment may not be an option. Angel capital is typically used to help a company prove out its technologyand/or business model, secure customers and start its growth trajectory. Angel investors will invest smaller amounts and tend to be more patient with their investment (i.e., willing to wait a bit longer for an exit than a VC) and offer somewhat more company favorable terms.