Linkages Between Angel and Venture Capitalists

A new study by researchers at George Washington University looked at the relationships between angel investors and institutional venture capitalists (VCs). The survey asked angels and VCs about how they worked together and how they perceive one another. VCs have a very positive view of angel investors, with 94% of those surveyed agreeing that angels are beneficial to the VC business.
This finding may come as a surprise to angel investors, as only 72% said that VCs view them as beneficial partners. The industry’s prevailing view is that angels serve as a “feeder system” for VCs who tend to fund larger, later-stage deals. But, all is not rosy. These general positive perceptions tend to break down when angels and VCs are asked about specific deals. Fifty-eight percent of angels said that their experience with VC investment in their portfolio companies was negative. An identical number (58%) of VCs had the same opinion about angel investors. The authors argue that these results suggest that angel and VCs need to better communicate with one another, and also consider joint training sessions where each side can better learn about how the other operates.