Previously on My Blog…Individual Investors vs. Investor Clubs…
That sounds like the first line of a really boring Netflix Original Series.
But it’s not for 3 reasons:
- Netflix is awesome and does not do boring!
- I’m actually talking about my previous post “Individual Investors vs. Investor Clubs.”
- “Individual Investors vs. Investor Clubs” is a boring post, but if you’re reading this one you will probably like that one, too. It’s all about Individual Investors vs. Investor Clubs. Who knew?!
This time let’s talk about Angel Investor Groups vs. Venture Capitalists and how you can understand and work with both. I’m trying to keep it short here so ask questions in the comment section below if you want to dive in deeper.
Angel Investor Groups:
Typically more sophisticated than Investor Clubs, Angel Groups often have a professional business analyst or investment advisor leading the group. Angel Group members typically commit dollars to the group and act as one with the group. If the group decides to invest, everyone invests. The goals of the Angel Group are to build a diversified portfolio and collectively own parts of multiple businesses at one time.
Now you are playing in the startup big league. Venture Capitalists (VCs) can be individuals, groups or huge international corporations. They are typically very sophisticated investors often with thousands of opportunities. VCs have the big pile of cash and get the biggest number of “asks.” But don’t let this scare you. You’ll get their attention if you have the right business in the market space and they feel you have a strong chance for growth. VCs often require that you have strong and sustainable income or a strong and sustainable user following before they want to talk. They simply don’t want or need to take chances on early stage businesses that don’t have a customer base. They want to invest in you and your team once you have proven that you can use money and resources well to get market traction or revenue.
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