Money Talks Podcast: What’s the difference between an angel investor and a venture capitalist?

7 months ago 109

There’s never a better time to be an entrepreneur because of the widely available funding today. But who should you pitch to and what do they expect?

Co-founder of Fintech Nation and adviser to the NUS Alumni Ventures Vanessa Ho, shares more. 

Two common funding options that startup owners can choose from - angel investors or venture capitalists. (File photo: iStock)

Here's an excerpt from the podcast:

Andrea Heng:  So the majority of us are salaried workers, right? But we've heard of two terms, angel investors and venture capitalists. You are in a unique situation where you're involved in both. Using a simple analogy, describe the biggest difference between the two. 

Vanessa Ho: I think people talk about your first fundraising round, like raising from the three Fs: Friends, family, and foes.

Angel investors are not too far away from friends, family, and foes. If you want to compare angel versus VC (venture capitalists), angel investing - investing in one stock, like an NVIDIA stock or Microsoft stock. VC - like a mixed portfolio, like a mutual fund or ETFs.

As an angel (investor), it's like being a social media creator. You can do anything you want, post any content, invest in any sort of thing.

You don't have a structured mandate where you can only do this amount of content in this brief and then some things may go viral, and then some things fail.

But being a VC is like being a TV actress or a movie actress. You have to follow a certain branding guideline, just like your investment mandate.

You have a certain structure to do it, and you can expect stable returns because your TV...

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