Explaining Angel Investors, Venture Capitalists, and Hedge Funds in a simple, informative way:
⸻
Step-by-Step: Understanding Angel Investors, VCs & Hedge Funds
Step 1: What is an Angel Investor?
An angel investor is a wealthy individual who invests personal money into early-stage startups—usually when the risk is highest.
• Think of them as the “first believers.”
• They often offer mentorship along with funding.
• Investment range: $10k – $500k
Step 2: What is a Venture Capitalist (VC)?
A VC manages a fund collected from many investors. They invest in startups that are a bit more mature and ready to scale.
• Focus on high-growth startups
• Typically demand equity and a board seat
• Investment range: $1M – $100M+
Step 3: What is a Hedge Fund?
A hedge fund is a pooled investment fund that uses advanced strategies to generate high returns.
• Invests in stocks, bonds, crypto, derivatives, real estate, etc.
• For wealthy or institutional investors only
• Known for high fees and complex tactics (like short selling or leverage)