Angel investor is someone who puts their own finance

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angel investor is someone who puts their own finance into the growth of a small business at an early stage. The amount they invest is flexible and they can also provide insight and advice about the business. The advantage is the business agreements is flexible. Angel investors have a more informal investment criteria compared to the traditional financial lenders, including banks and venture capitalists. Because they are investing their own money, their business deals can often be negotiable. The disadvantage of funding from angel investors can actually be deceptive. While the majority of angel investors truly look beyond the promise of monetary return, there are a few angel investors who are greedy and motivated by money rather than in promoting the good of the firm. These angel investors tend to be less patient with new entrepreneurs and do not provide any mentoring or guidance during a company’s early stage of development. Lastly, the source of funding is venture capital. It is a financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. For startups without access to capital markets, venture capital is an essential source of money. The advantage is that the business can gets the expert opinion of venture capitalist. Since they are into the market for a long period of time and their experience comes in handy during crunch situations. So venture capitalist does not provide only capital but they also give their experience to new business which is a crucial aspect as far as new business is concerned. The disadvantage is dilution of control of the management. Due to the venture capitalist takes stake in the business and they tend to interfere in the day to day activities of the business and the owner who started the business feel suffocated as he or she cannot take decisions independently.
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