Angel vs Venture Capital

 The difference between angel investor and venture capitalists can be summarized as below:

Business Angel Investor:

• An individual investor.
• May be willing to invest in early-stage or start-up businesses, as well as established companies.
• Financial support for the start-ups without profit motives.

Venture Capital:

• A company or business rather than an individual.
• Seldom interested in early-stage, unless compelling reasons (eg. high tech with already successful founders).
• Professional investors with a profit motive.

Recently the government has decided to scrap a tax on seed funding provided to start-ups by Indian angel investors. The tax is one of the key reasons that 90 per cent of Indian start-ups are financed by foreign venture capital and angel funds. This tax applies only to domestic investors and thus acts as a disincentive to local funding for start-ups that the government wants to incentivise instead.