It may also depend on the track records of the Founders. They tend to co-invest with trusted friends and associates or on the recommendation of service professionals. According to the Center for Venture Research, the majority of active private investors report that they have additional capital to invest. Limited deal flow is their primary constraint. Constraints in resources, geography and personal contacts may limit the number of deals private investors may participate in.
Angels risk their capital based on their experiences and instincts.
Angels may require board representation. They can attract other resources, talent and other angels and can increase the valuation of the company by their participation. On the down side, angels have been known to be difficult to manage, idiosyncratic, litigious and time-consuming. In these situations, the firm involved typically has the right to invest in the next financing. Venture capitalists usually quote an investment process of 60-90 days.