Explanation :
Angel investors differ significantly from venture capital firms, which typically invest other people's money, invest at a somewhat later stage of corporate development, invest more money, and take a more active role in the daily affairs of their investees.Besides funding the business in significantly better terms than a bank or other lender, an angel investor offers expertise and a valuable network of contacts, seeking to see the business propel. Angel investors should be accredited by the Securities Exchange Commission (SEC) and realize an annual income of $200,000, on top of a minimum net worth of $1 million.In a nutshell :
- An angel investor is an individual who provides small amounts of startup capital and advice to businesses in exchange for an equity stake or convertible debt.
- These people can be of great assistance in providing funding when a business has just started, and it does not yet have a sufficient product concept to attract the attention of venture capital firms.
- They also do not usually require much control over the business, and so may not demand a board seat.
- Angel investors differ significantly from venture capital firms, which typically invest other people's money, invest at a somewhat later stage of corporate development, invest more money, and take a more active role in the daily affairs of their investors.
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