Question

Distinguish between angel investors and venture capitalists.

State any four difference between Angel Investors and Venture Capitalists.

Answer 1

Sr. No.	Angel Investors	Venture Capitalists
1.	People invest their personal funds in a startup or early-stage company, typically in return for equity ownership.	Professional investment firms or funds pool money from investors to invest in startups or growing businesses.
2.	Invest their personal wealth.	Use funds collected from multiple investors (e.g., institutions, high-net-worth individuals).
3.	They have a higher risk tolerance because they are investing their own money.	Slightly lower risk tolerance as they are managing funds from others and need to ensure returns.
4.	Acquire smaller equity stakes and typically don’t demand significant control.	Acquire larger equity stakes and may demand board seats or control over major business decisions.