Angel Investment vs Venture Capital – Which would you choose?

VC's vs Angels
This morning I read a great post by Venture Spring. Venture Spring is a hugely well respected ‘venture development’ company which “helps Fortune 500 companies innovate like startups” according to their company mantra. The article is about the differences between venture capital funding and funding from angel investors.

Startups are often all too eager to take one option over the other based on their own preconceptions. It’s important to realise that one may be more suited to one type of startup over another (and vice versa. So, understanding the points of difference could be crucial to the way in which you approach your fundraise; and how your company ends up being run down the line. So it’ll be worth your while familiarising yourself with the key points…

You can read the full article on their site here. (It’s a 5-10 min read).

Or, I’ve summarised the key differences for you here and (added in a few that they missed!):

Angel Investors:
– are private individuals investing their own money
– can make quick decisions regarding investment
– can be flexible in the amount they invest
– can provide expertise, contacts and support as well as capital
– can feel personally attached to your business
– can be as hands-off or hands-on as you require
– can qualify for tax breaks like SEIS and EIS
– do not have to be given board positions

Venture Capital Firms:
– are whole companies that invest in startups
– are run by professional investors investing money from corporations, individuals, funds and foundations
– take board positions and have a strong say in how the company is managed and grown going forward
– invest much larger amounts than angel investors
– do not usually invest at seed stage
– generally invest not less than £1million
– take a longer time to make investment decisions and broker deals

What’s your take on the issue? Do you have any experiences you’d like to share? Comment below or hit me up on Twitter

The Top US 10 Cities Of The Year For Private Tech Acquisitions

PrivCo has released its 2014 Private Tech Company M&A Research Report.  The report included a Top 10 Ranking for private tech acquisitions, with Silicon Valley ranking as the #1 metro area with 281 private tech company acquisitions in 2013. Ranked just behind it were New York (Ranked #2) & San Diego (Ranked #3). Interestingly, up-and-coming tech hubs like Chicago, Austin, and Atlanta are challenging traditional leaders like Boston, which fell to the ninth spot on this years report, despite being Ranked #3 in last year’s Top 10 U.S. Cities For Private Tech M&A.

 

Distribution of Venture Capital Deals in the US by Industry, Q1 2014

In the first quarter of 2014, software companies also received three times the number of deals of the next closest industry category, Media & Entertainment. 46% or 126 software deals were completed in Q1, compared to 40 in Media & Entertainment. Biotechnology companies were third with 8% or 22 deals. The following graphic provides a comparison of deals by industry for Q1, 2014.

Google Ventures has been the most active corporate VC since 2012

Here is the list of the top 25 most active corporate VCs since the start of 2012:

Interestingly the top 10 most active investors participated in more than 40% of the VC deals during this period. Google Ventures and Intel Capital combined to participate in more than 1/5 of all corporate venture capital deals, which is pretty staggering.

Infographic – New SEC Rules on General Solicitation

The SEC has lifted the ban on General Solicitation and permits startups, private companies, venture capitalists, and hedge funds to openly advertise that they’re raising money in private offerings.

Angel Investment Network’s Weekly Funding Roundup

Here’s a roundup of some of the recent seed-stage and angel deals from around the world: 

  • Liquor.com, a site featuring award-winning articles, hand-selected cocktail recipes & bar guides, bags $3.1M Series B funding
  • AcuityAds, which uses real-time bidding for advertisers to bid on ad time just before a consumer loads a webpage, raises $3M funding
  • Chairish, an online marketplace to buy and sell pre-owned furniture, has raised a $3.2 million seed round
  • Kissmetrics, a web analytics startup that helps small e-commerce companies make data-driven decisions, has raised $7M funding
  • Nifti, a new shopping service that helps you keep track of when items you want to buy go on sale, has raised $800,000 seed funding
  • RedMart, an online grocery service in Singapore, has secured nearly $3.5M Series A funding to grow the business
  • Swell, a new mobile listening experience for news & information that learns what you like as you listen, raises $5.4M Series A funding
  • TB Biosciences, which is developing a point-of-care test for the detection of tuberculosis, has closed $1.5 million Series A financing
  • Maker’s Row, the marketplace that connects American manufacturers with businesses, has raised $1M seed funding led by Comcast and Index
  • Viableware, which designs software & hardware products intended to replace traditional bills in restaurants, lands $6.5M Series B funding
  • KartRocket.com, a do-it-yourself (DIY) e-commerce platform for Indian SMEs and retailers, has raised seed funding
  • Riskive, a stealth-mode cyber security technology start-up, has secured $2.2M in seed funding
  • Panjo, a marketplace for the world’s most ardent auto, sport, and hobby enthusiasts, has raised $1.6M seed funding
  • NatureBox, the leading online service for healthy snack food, has secured $8.5M Series A funding led by General Catalyst Partners
  • LiveMinutes, an online collaboration service you can use for meetings and web conferencing, has closed a $1.4 million seed round
  • Geepers, whose vision is to create the primary geo-physical address protocol in the digital world, has secured angel funding
  • SnapLion.com, a platform which enables users to develop mobile applications, has raised funding from venture funds and angels
  • Crowdly, an online platform that helps big brands promote themselves on Facebook, has raised $1.2M seed funding
  • Hall, which provides a cross-platform, cross-device messaging service to businesses, has closed $5.5 million Series A funding
  • TheShoppingPro, an internet-based startup aiming to make the online shoppers’ life easy and rewarding, has raised Rs 22 lakh angel funding
  • Addvocate, a service that helps companies put some operations management behind its social media efforts, has closed $2M Series A funding

To get regular updates, come follow us on Twitter: http://twitter.com/angel__network or register for our blog at http://www.angelinvestmentnetwork.net/wp-login.php?action=register.

Have you managed to raise capital for your company?  We always love to hear from entrepreneurs who manage to get funded.

Or are you looking to raise funding?  Send me a summary of your project at mike@angelinvestmentnetwork.co.uk and we’ll try to help.

 

Angel Investment Network’s Weekly Funding Roundup

Here’s a roundup of some of the recent seed-stage and angel deals from around the world: 

  • Vaultize, a cloud-based enterprise file sharing and sync (EFSS) and mobility vendor, has raised Series A funding from Tata Capital
  • Yellloh, a web-based platform dedicated to elevating the level and quality of online discussions, has closed seed funding
  • SoThree, the developers of Umano, the app that’s revolutionizing the way you listen to articles on the go, has raised ~$1M seed funding
  • SnoopWall, a patent-pending antispyware program that blocks remote eavesdropping, has secured funding from the Angel Breakfast Club
  • TouchOfModern, the online source for high-quality, innovative design products from around the world, has raised $3M Series A funding
  • Instacart, which offers grocery delivery services from multiple local stores within an hour, has raised $8.5M Series A funding
  • MarkITx, the premier online marketplace for buyers, sellers and wholesalers of secondary IT equipment, secures $2.15M seed funding
  • TrustRadius, an online platform for user-generated reviews of business software, has raised $5 million Series A funding
  • Codeanywhere, an online code editor pitched as ‘a Google Docs equivalent for developers’, has raised a $600,000 Series A investment
  • Privy, a customer acquisition and retention solution for multi-unit local businesses, lands $1.7M seed funding
  • Opbeat, a collaborative web operations platform you can set up in minutes, has raised a $2.7M Series A round led by Balderton Capital
  • Parenting information and e-commerce firm wauwaa.com, has closed €220,000 seed funding from angel investors
  • Mark43, whose software lets police officers spend less time doing paper work and more time in the field, has raised $1.95M seed funding
  • TalentBin, the “talent search engine” that turbo-charges talent discovery across the web, has announced $2 million Series A funding
  • Waygo, an app that instantly translates Chinese characters into English by hovering a smartphone camera over it, gets $900K seed funding
  • Soma, a charitable water filter maker, has closed $3.7M4 seed funding led by Baseline Ventures and Forerunner Ventures
  • EyeEm, a community and marketplace for high quality mobile photography, has raised $6 million in ventrue capital funding
  • Proven, the leading on-the-go employment app, has announced the closing of $1 million in additional funding

To get regular updates, come follow us on Twitter: http://twitter.com/angel__network or register for our blog at http://www.angelinvestmentnetwork.net/wp-login.php?action=register.

Have you managed to raise capital for your company?  We always love to hear from entrepreneurs who manage to get funded.

Or are you looking to raise funding?  Send me a summary of your project at mike@angelinvestmentnetwork.co.uk and we’ll try to help.

 

The Top 20 Cities for Venture Capital Activity in the US

Here are the 20 the most capital-dense start-up communities in the US, according to research by Richard Florida, Co-Founder and Editor at Large at The Atlantic Cities

Which of these are you most surprised to see in the list?

Angel Investment Network’s Weekly Twitter Roundup

Angel Investment News:

  • Global venture capital financing hit $US10.4 billion in the second quarter of 2013: http://ow.ly/mKhZI
  • Mena investments up $200m in 2012 according to the Mena Private Equity Association’s annual report: http://ow.ly/mKkxi Infographic – €5.1 billion market shows European angels on the rise! http://ow.ly/mKCln
  • China’s venture capital market warms: http://ow.ly/mMHf2
  • ‘Super Angels’ in UK having growing influence in investment market: http://ow.ly/mSMzB
  • US Venture Capital Investment Amounts Doubled In Q2. Bay Area Companies Raised More Than NY, LA & Boston Combined: http://ow.ly/mTEDO
  • Renaissance Venture Capital Attracted Nearly $300 Million In 20 Michigan Companies: http://ow.ly/mTCNp

Business Plans & Pitching:

Fund Raising:

  • Tech guru and author Guy Kawasaki provides a top 10 list of the lies that entrepreneurs tell: http://ow.ly/mKicM
  • 5 Things to Avoid When Raising Mo2ney for Your Startup: http://ow.ly/mMHyj
  • The SEC’s Removal of General Solicitation Changes Everything: http://ow.ly/mRpwS

Marketing & Social Media:

Start-Up & Entrepreneurship:

To stay updated, come follow us on Twitter: http://twitter.com/angel__network or register for our blog at http://www.angelinvestmentnetwork.net/wp-login.php?action=register.

Read anything interesting? Feel free to add links to any articles or resources you’d like to share with the angel community.

Or are you looking to raise funding?  Send me a summary of your project at mike@angelinvestmentnetwork.co.uk and we’ll try to help.