Venture Capitalist

Unlike Angel investors, a Venture capital fund is a firm involving a whole team of professional investors whose primary objective is to maximize their invested wealth. Generally, venture capital firms have a bunch of investors who pool their funds, a board who makes decisions, a team who analyses the investments and searches for opportunities, and also a team of professionals who would take care of the growth prospects of the business which is funded. Venture funders are driven by the potential growth objectives on the business in which they invest, and hence they generally invest in early businesses rather than an idea which is yet to materialize unless they see a great growth opportunity in it. Venture Capital firms provide capital in the form of shares and direct the company towards grown for a stipulated period of time after which they sell back their shares to the owners gaining in the process. Because venture capitalists are people who mean business they would push the company towards grown and would expect involvement on the board to make decisions, and also since there are multiple investors involved they can inject the business with heavier capital, unlike angel investors.

Angel Investor

An angel investor is generally a high net worth individual who provides capital for a business start-up out of his own pocket in exchange for convertible debt or equity. Unlike professional investors whose primary objective is a return on their investment, angel investors decide to invest in your idea is driven by their personal liking about your business model or product. Since the primary objective of an angel investor is not to make money out of your idea, due to which there is always a lack of push for growth also for which they may not be interested in directing your business decisions giving you the freedom to work your way on. Since angel investors invest when the business is still at its baby stage they bear heavy risks.

An angel investor could be your friend or someone from your family, who invests in you rather than your business growth prospects.