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An Angel Investor and Venture Capitalist offer the same basic function, which is to invest in companies in order to see a return on their investment. The types of companies that they would invest in are usually start up companies or ones that they feel are under valued.
Angel Investors would typically invest in "seed money" to help the company get off the ground. A venture capitalist would typically invest in companies that have already started production.
Angel Investors would typically use their own money for the investment where as venture capitalist would rely on funds in which they hold in trust to provide the capital infusion. Angel investors would also invest in companies that hold a special interest for them. This would be different than a venture capitalist that would invest strictly on the paradigm of if they could obtain a certain return on their investment.
In addition, a venture capitalist would seldom want any say in the day-to-day operations of the firm. The angel investor is often interested in a mentoring relationship with the owner. However, the venture capitalist always wants and requires a seat on the Board of Directors in exchange for the funding.
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