Types of Investors
Capital has to come from somewhere. To become familiar with the terminology, 📖 read this informative post written by Zoë Matherne that outlines the differences between venture capitalists, angel investors, and private equity firms. Also, 🎧 listen to this excellent podcast: Business Scholarship Podcast hosted by Professor Andrew Jennings. Professor Jennings interviews Professor Anat Alon-Beck on her scholarly work, Alternative Venture Capital: The New Unicorn Investors. I recommend reading the article in its entirety when time permits.
In addition, one should think about issues when investors also end up being part of the startup’s governance structure. Often, venture capital or angel investors insist on having a seat on the Board of Directors. Professor Elizabeth Pollman’s article, Startup Governance “provides a comprehensive framework for understanding the unique combination of governance issues in startup companies over their life cycles. It shows that venture-backed startups involve heterogeneous shareholders in overlapping governance roles that give rise to vertical and horizontal tensions between founders, investors, executives, and employees. These tensions tend to multiply as the company matures and increases the number of participants with varied interests and claims.” I recommend that you read Professor Pollman’s article when time permits. In the meantime, 🎧 listen to her discuss her article on the Business Scholarship Podcast.