Angels have a reputation for making quick investment decisions but their resources are typically limited. Accordingly, angels are often less tolerant of losses and have a shorter investment horizon than most venture capitalists. Private placements usually result in less equity dilution for existing shareholders than venture financing. Fees and expenses are high relative to funding from venture or angel investors, and the timetable for completing a private placement is often long and uncertain. Private investors generally offer little or no business counsel, and tend to have minimal tolerance for losses and under-performance.
Few companies are able to access public equity markets.
The public market is attractive for its high valuations, abundant capital supply and liquidity characteristics. Transaction costs are high, including ongoing legal expenses associated with public disclosure requirements. Companies often chose to fund long term strategic initiatives with venture funding instead of public equity to avoid legal exposure and the public market's focus on near term quarterly performance. Begin by identifying a list of venture capitalists whose investment preferences match your needs and company profile with regards to size of investment, stage of development, industry and geographic location. It is a list of active venture firms published annually by Venture Economics including each firms' location, investment preferences, contact persons and capital pool.