Angel Investors, Defined

February 10, 2005 by Dane | 12 Comments
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John Dmohowski: “Angel investors are probably not as well understood and certainly get less attention from the business press than the more traditional Venture Capital firms. Angels are accredited investors (high net worth) who pool their business knowledge and interest in helping fledgling technology companies. They invest very early in the process, usually at the proof of concept stage or before the product or service is mature enough for market introduction. They have less formal, though not necessarily less rigorous due diligence processes and they tend to focus a bit more on technology businesses – where many of the angels made their money and achieved success. Angel investors differ from VCs in a number of ways: they get into companies earlier, they provide smaller amounts of funding, they have actual operational experience (usually) and they provide mentoring and assistance to help entrepreneurs beyond what might be expected from traditional VCs. They recognize that the management teams they are investing in are usually technology focused, business novices and haven’t the track record or operational history.”

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