Money Talks Podcast: What’s the difference between an angel investor and a venture capitalist?

There’s never a better time to be an entrepreneur because of the widely available funding today. But who should you pitch to and what do they expect?

Co-founder of Fintech Nation and adviser to the NUS Alumni Ventures Vanessa Ho, shares more. 

Here's an excerpt from the podcast:

Andrea Heng: 
So the majority of us are salaried workers, right? But we've heard of two terms, angel investors and venture capitalists. You are in a unique situation where you're involved in both. Using a simple analogy, describe the biggest difference between the two. 

Vanessa Ho:
I think people talk about your first fundraising round, like raising from the three Fs: Friends, family, and foes.

Angel investors are not too far away from friends, family, and foes. If you want to compare angel versus VC (venture capitalists), angel investing - investing in one stock, like an NVIDIA stock or Microsoft stock. VC - like a mixed portfolio, like a mutual fund or ETFs.

You don't have a structured mandate where you can only do this amount of content in this brief and then some things may go viral, and then some things fail.

You have a certain structure to do it, and you can expect stable returns because your TV and movies will do at least x amount of reach and awareness, but you may or may not get the moonshot opportunity like the angel investors. 

Andrea: 
Okay, that's a really interesting way of putting it. So, when it comes to picking the company to invest in, how different is the strategy for an angel investor compared to a venture capitalist? 

Vanessa:
Most angels that I meet because of my work at NUS Alumni Ventures and Fintech Nation Fund as well, they don't exactly have a clear strategy in terms of investing, and even for myself, I know what I can do better and what I don't, but it's not so much a formula. 

I invest in things that I understand and that I can add value to as an angel investor.