An angel investor may go on his gut business instinct. He may simply find the idea compelling. Or there may be something about the product or the market strategy he believes in. Most angels require a strong management team. When you have used up your angel capital and are ready for greater growth, you might consider venture capital.
Venture capitalists are professional investment firms.
You can find the names of some of the biggest venture capital firms by looking at the prospectuses of high-profile companies that have recently had IPOs. These prospectuses can be found as part of a company's registration statement on the Securities and Exchange Commission's Edgar website. Strong management is also important, although venture capitalists often expect to provide or bring in additional management expertise. They expect a seat on the board of directors and special rights that allow them to oversee management. They also want to be able to cash out of the company within two to five years.