Key Takeaways
- Angel investors are typically wealthy individuals who invest early in startups and sometimes act as mentors.
- Venture capitalists typically invest larger sums of pooled money in more developed startups.
Full text
Two common sources of investment for startups are angel investors and venture capitalists. Both invest money into businesses and take calculated risks.
Angel investors are typically accredited investors, meaning they have a minimum net worth of $1 million and an annual income of at least $200,000 pursuant to current regulations (which may change from time to time pursuant to SEC rules and regulations). Angel investors are often family and friends of founders and are more focused on helping build someone’s business. They are more likely to invest earlier in businesses that are starting out and can sometimes act as mentors.
Venture capitalists are typically people or firms who invest in small companies using pooled money that is not their own. They typically invest once a business is more established. They often invest more money but expect higher returns.
Startups will likely approach both kinds of investors in search of funding over the course of their lifecycle. Having an experienced startup lawyer may be helpful in navigating various forms of investment.
As always, should you have any questions about anything contained within this Insight, don’t hesitate to get in touch with us via call, text or e-mail using the contact details listed in our site footer, or via the form below.
Disclaimer: Please note that the information provided in this blog post does not, and is not intended to, constitute legal advice. Rather, all of the information, content, and materials available on this and every other page of our website is made available by us for general informational purposes only. The information in this post or anywhere else on this website may not constitute the most up-to-date legal or other information, and should not be relied upon for making any decision, acting, or refraining from acting. All liability on the part of Chatterjee Legal, P.C. and any and all of its attorneys and/or other professionals with respect to decisions made, actions taken or actions not taken based on the contents of this blog post, this page, or this website is hereby expressly disclaimed. The contents of this blog post, this page and this website are provided on an “as is” basis, and no representations are made that such content is free from errors. Our content contained within this post or elsewhere on our website may link to websites, content or other resources belonging to third parties. We present these links only for convenience purposes, and we make no representations or warranties of any kind with respect to any such third-party websites, content or other resources. Access to and/or use of this blog post, this page, or this website does not create an attorney-client relationship between you and Chatterjee Legal, P.C. or any of its attorneys or other professionals.