Conversely, venture capitalists spend around two-thirds of their funds on expansion funding of their existing portfolio firms. Business angels prefer to have a say in the running of the firms, which may force the entrepreneur to give up some degree of control. Some business angels may have limited expertise in running the particular type of investee firm they fund, making their contribution less value-added and more meddlesome. The search for business angel funds is often difficult though, requiring confidence and persistence on the part of the entrepreneur. There are no directories of business angels.
Business angels prefer anonymity, to avoid being deluged with investment proposals.
3.The subject matter of business angel investment is often private and personal. There are no public records of their investment transactions. It is clear that business angels are seeding start-up firms, of which some subsequently receive funding from more formal sources of finance such as venture capitalists, while the majority never need to raise further funds. A potentially complementary relationship exists between business angels and venture capitalists , where the angles act as a farm system for the venture capitalists, since angels invest in and nurse small firms with growth potential into large firms that then interest venture capitalists for further rounds of investment. It is clear that a healthy informal venture capital market is required for the institutional venture capital market to thrive.