Comparing Angels and Venture Capitalists as Investors in Entrepreneurial Firms

Angel investors (angels) and venture capital (VC) investors are both important sources of financing for entrepreneurial firms, but some critics, particularly VCs, often believe that angels are less able than VCs to perform due-diligence. However, an alternative view holds that VCs and angels are equally adept at adding value to startups. For example, a recent article by AngelList mentions that the presence of top VCs in a seed funding round of a startup does not affect the probability of its success. It is therefore important to empirically analyze and compare the value added to startups by angels and VCs. However, … Read more