Venture Capital and Angel Investors
Despite the fact that Venture Capital funding fell during the 2008-2009 fiscal year, venture funding also picked up along with mergers and acquisitions. There is no question that there have been some tough times for both entrepreneurs and venture capitalists alike. There are signs that VC funding will be back in the norm at the beginning of 2012. There is no question that in most cases, when entrepreneurs are looking to raise capital from angel investors or venture capitalists, the odds are almost always against the entrepreneur.
In most cases, the entrepreneur ends up dealing with conservatives who invest in start-ups, which involves a rather high risk to the investor. In any case, for an entrepreneur to have any chance in raising venture capital he has to do quite of bit of work and research to make sure that everything is right and that the investor agrees with the research. The most important thing to look at here is that you need to make wise decisions in your business plan and all your research when going to propose your company to an investor.
As far as different industries are concerned, venture capital firms usually invest in the industries and sectors that their partners have experience in. In most cases this primarily depends on the firm itself and the expertise of the partners in that firm. Through services you can get online you can gain access to many investors with a wide range of different industry expertise. There are thousands of investors with all kinds of different industry, geographic and stage preferences. All of these preferences are very important in choosing investors.
The difference between angel investors and venture capitalists is that, on one hand angel investors invest their own money, whereas venture capitalists invest money from funds that they manage. Furthermore, angel investors are not professional investors, whereas venture capitalists and other institutional investors are professional investors. What does this mean? Well, it is quite simple. Angel investors usually invest their own money and since it is their own money, they have a wide range of different reasons for investing it. On the other hand, venture capitalists and equity investors invest on a professional basis and do not invest their own money. Institutional investors usually work for a private equity firm or, in the case of venture capitalists, a venture capital firm. These firms manage equity and the money invested usually comes from different firms. These funds can come from pension funds, endowments or the private funds from wealthy families.