Which statement best describes the difference between a venture capitalist and an angel investor?

The statement that an angel investor is motivated by personal feelings rather than profit highlights a key aspect of the role that angel investors often play in the startup ecosystem. Angel investors typically provide funding to early-stage companies in exchange for equity, and their motivations often extend beyond just financial returns. They may be driven by a desire to support innovation, help entrepreneurs succeed, or invest in ideas they are passionate about, which can include personal interests or experiences.

This human connection and the desire to contribute to the growth of early-stage ventures often set angel investors apart from venture capitalists. While profit is certainly a consideration for all investors, venture capitalists usually manage funds on behalf of their investors and focus on higher return-on-investment metrics, making financial gain a primary motivation. Moreover, the nature of how each type of investor operates can differ significantly, with venture capitalists typically looking to invest larger sums into businesses that are expected to grow quickly and provide substantial returns within a specific timeframe.

In contrast to the assertion about personal motivation, other choices present misconceptions about the nature of angel investors and venture capitalists.