Types of Investors

Individual, angel, venture, institutional, family office, corporate and fund investors; limited and general partners; and what each type's incentives mean for a company and for you.

Who puts money in, and what each one wants back

Lessons

• An angel invests their own money, and that changes everything about how they decide — Individual and angel investors put personal capital into companies. They move fast, write smaller cheques and answer to nobody - which is both their advantage and their risk. (9 min)
• A venture fund needs a few companies to return the whole fund — Venture capital firms invest other people's money in young companies, and their fund structure makes them look for rare, very large outcomes rather than steady good ones. (10 min)
• LPs provide the money; GPs make the decisions — Most private funds are partnerships between limited partners, who commit capital and have limited liability and control, and a general partner, who manages the fund and earns fees and carried interest. (9 min)
• Pensions, endowments and family offices invest on different clocks — Institutional investors and family offices manage large pools of capital with specific obligations and time horizons, which determine what they buy, how long they hold and how they behave in a crisis. (10 min)
• A corporate investor may want the company more than the return — Corporate venture arms and strategic investors put money into companies for strategic reasons as well as financial ones, which can bring distribution and credibility - and conflicts. (9 min)
• Knowing what each investor needs back tells you how they will behave — Every investor type has a different definition of a good outcome. Mapping those needs explains most disagreements on a cap table before they happen. (10 min)

All Investor Academy subjects