When it comes to financing your startups, shows such as Dragon’s Den can make you think it’s all about impressing investors and winning millions of pounds off the bat. In fact, investment comes in all shapes and sizes. Investment in the tech sector has already reached ?459m this quarter, but if you are seeking to bring an investor on board, what are the options for you? Here’s a look at the difference between the two main kinds you might be considering – angel investment, and venture capital investment.
Angel investment
An estimated ?850m per annum is invested by angels annually in the UK, making them a really significant source of funding for the UK’s startups.
Put simply, an angel investor is someone who puts their own finance into the growth of a small business at an early stage, also potentially contributing their advice and business experience. They might be a wealthy, well-connected individual who’s taken a personal liking to your product, a group of angel investors who club together to fund startups, or even a friend or member of your family who’s decided to put some money in.
Angels make their own decision about the investment, and in return for providing personal equity they take shares in the business. Continue reading “The difference between angel investment and venture capital”