Hi it's Brett Cenkus the right brain business attorney and today we're doing

another what's the difference between so today we're talking about what's the

difference between angel investors and venture capitalists as is usually the

case when I do these the answer is not much I mean at least from a broad

perspective angel investors and venture capitals both invest money into private

companies hoping that they'll grow right so they put money in almost always as an

equity position meaning they take stock or something hoping for a company to

grow now angel investors tend to operate with their own money I mean it's kind of

what would define an angel investors they're using their own cash and

sometimes they it could be someone who has a full-time job doing something else

and they're just looking for small deals private companies who need growth

capital sometimes they're organized more more formally sometimes they have clubs

right they're still sort of each doing their own thing but they're trying to

source deals together other times you will see some groups that call

themselves like the Silicon Valley Angels I don't know if they're still around but

they're really kind of like a venture capitalist a little bit and so venture

capitalist what defines them is they're using other people's money so they

usually have much bigger pools of money from pension funds and sovereign wealth

funds and other very well-heeled private individuals and family funds and things

like that so big pools of capital so they're using other people's money they

may use a little bit of their own but fundamentally they're managing other people's

money that's the big difference between the two because venture capitalists have

much larger pools of money they're looking for deals that are larger

because if you're managing 100 million dollar fund it doesn't make sense to do

that in $250,000 chunks I mean you'd have 400 investments and you can't

manage that all so venture capitals are looking for bigger deals which means

they're looking for companies that are a little bit further along the growth of

the life cycle of a company than say an angel investor so an angel investor

might put in $100,000 $500,000 in a seed stage or even friends and

family kind of round deal very early on if venture capitals won't get involved

until series A series B Series C so you've heard me talk before the

financing all proceeds like that you've got to got your friends of family seed

and then ABCD and there's nuances there's you know a - there's all sorts

of stuff people come up with but the point is the rounds get I mean the

company continues to grow derisk need more capital to grow on their way out

the door both angels and VCs are usually looking for homeruns they're not

interested in investing in my law firm they couldn't legally I guess because

they're you know not allowed to have investors like that unless they're

licensed lawyers but the point being they don't want little professional

services businesses they don't want to invest in cleaning businesses and they

want things that can really scale angels and VCs tend to be the same way although

angels sometimes are a little bit more opportunistic maybe a little bit more

interested in things like bars and restaurants and stuff like that but

again the broad point is they're very similar slightly different sort of at

the at the at the margins but they're both looking to invest the capital and

the companies that are gonna grow and grow quickly and large a few questions

about early-stage financing angel investors venture capitalists rounds

how you structure those deals equity versus debt give me a call drop me a

line Thanks