5min
Module 1: The Funding Landscape
Module 2: The Pre-Seed and Seed Stage
Module 3: The Series A Stage
Module 4: Later Stage Funding (Series B and Beyond)
Module 5: The Fundraising Process
2/16 Lessons
Content
1.2: The Key Players: Angels, VCs, and Accelerators
The journey from a seed-stage startup to a multi-million-dollar company requires capital, and that capital comes from different sources at different times. Understanding these key players is essential for knowing who to approach and when.
1. Angel Investors
Angel investors are wealthy individuals who invest their own money in early-stage startups. They are typically successful entrepreneurs or executives who have a deep understanding of a particular industry.
What they invest:
They invest their personal capital, often in the pre-seed or seed stage. The check size can range from tens of thousands to hundreds of thousands of dollars.
What they provide:
Beyond money, angels often provide invaluable mentorship, industry connections, and advice. They are typically more risk-tolerant than VCs and are more interested in the team and the idea itself.
2. Venture Capitalists (VCs)
Venture capitalists are professionals who manage investment funds on behalf of limited partners (like pension funds and university endowments). Their job is to find and invest in high-growth companies in exchange for equity.
What they invest:
They invest money from a fund, not their own personal wealth. They typically invest in the seed stage and beyond (Series A, B, C, etc.). Their check sizes are much larger, ranging from hundreds of thousands to tens of millions of dollars.
What they provide:
VCs bring not only capital but also a strategic network, operational expertise, and a team of partners who can help the company grow. However, they are less risk-tolerant than angels and require more proof of concept.
3. Accelerators
Accelerators are organizations that provide a fixed-term, cohort-based program for startups. They are designed to "accelerate" a company's growth in a short period.
What they invest:
Accelerators typically provide a small amount of capital (e.g., $20,000 to $150,000) in exchange for a small percentage of equity (e.g., 5-10%).
What they provide:
Their primary value is not the money, but the structured mentorship, networking opportunities, and access to resources that can dramatically speed up a startup's development.