Angels or venture capital (VC's). What investors should you go to for your startup and business?
So you have built a company and are looking for funding or thinking of bootstrapping it. It's a hard choice. What should you do and what type of investors should you go for and should you go for any investors at all. Is giving up a piece of your company really worth it. After all, you have worked so hard, giving up a piece is not easy for anyone. But some companies need capital to fuel their growth without it they will die.
Think hard about whether you really need capital
This is a tough question. Do you really need capital? Think twice. There are a lot of good bootstrapped companies out there and more and more of them. Being careful with your finances and reinvesting your profits can be beneficial and keeps you in control of your company.
Venture capital will provide excellent advice and guidance to companies and founders who need it. Keep in mind the chance of getting funded is less than 1percent.
Angels or Venture capital?
Angels are usually better for super early-stage seed or pre-seed investing. VC's do normally come in at a later stage, however, are known for getting in a lot earlier and you have a lot of VCs which have created sort of Pre-seed funds right now. Everyone wants to get into the cap table as soon as they can for a great company and who woulnt. Angels are great for the first people who are willing to take risks. Obviously experienced angel investors are listened to carefully as they have more experience and chances of getting it right.
Venture capital investors are a great validation of the company once you have done the hard work. Great venture capitalists like the YC founders are very good at predicting the future which is super hard to do. They take bets on where sectors are going to end up just like the crypto sector and they bet on coinbase at an early stage. Same for companies such as dropbox and airbnb. It is run by a bunch of founders with great exits and has a great chance of getting it right.
Check this video showing the early coinbase investment interview by Gary Tan
Keep yourself open to choice and think hard about what you are looking to do with your company. Keep an open mind, fresh and clean. If your company is good enough offers will normally come to you so dont overthink it :)