I Learned the Difference Between Angel Investors and Venture Capitalists the Hard Way

All sources of money aren’t the same, and the differences could make or break your startup

Photo by Duncan Sanchez on Unsplash

Prior to raising capital for the first time, back when I imagined fundraising was the solution to all my problems, I didn’t have a keen sense of the true difference between angel investors and professional investors. I knew they both invested money, I knew I wanted money, and, in my mind, all money was the same. I was wrong.

Because I didn’t understand the differences between angel investors and professional investors (mostly VCs), I reached out to both types of investors indiscriminately. But that was a mistake. I wasted lots of time trying to fundraise from people who were never going to invest. I also took money from some people I probably never should have taken money from.

In order to save you from the same troubles, here’s a quick primer on the key differences between angel investors and professional investors. It’s the primer I wish someone had given me at the start of my fundraising journey.

Some practical differences

The standard way of distinguishing between angel investors and professional investors is that angel investors…