What do you mean by an angel investor?
An angel investor can be a wealthy individual or another entrepreneur that wants to invest in your idea and gain a stake in the ownership of your company. The stake can be decided based on the company’s worth or the value added by the angel investor to it. For example, if the valuation of a company is INR 1 Crore and he is investing 50 Lakhs, then the startup will be worth INR 1.5 Cr, and based on this amount, the angel investor can ask his stake.
Who is a venture capitalist?
A venture capitalist is an employee of a venture capital firm that invests other people’s money (held by them as a VC fund) into companies. Investors in VC funds are large institutions such as financial firms, insurance companies that invest a nominal amount in the high-risk investments with an expectation of hefty returns. Venture capitalists invest in companies that have the potential to grow big like Facebook or Google. Due to this reason, the venture capitalists don’t fund startups at the initial stage.
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