Punchtab
Key Problem
Kumaran is starting his next venture, Punchtab, after he left his successful startup, YouSendIt. PunchTab is an internet-based customer loyalty program offering website owners and mobile application developers a tool to reward customers based on desired activities. In the past early stage financing was given to startups in order to assist them with their early R&D, development of prototype and building teams. Although the
Difference between Angels and VC investors (goals, sources of funds, roles and impacts)
Angel Investors
VC Investors
Goals
Fund Early Stage
To be mentor in the venture
Usually interested in the industry
Prefers short-term exit
Fund Later Stage Deals
Wants big exit
High return expectation
Source of Funds
Personal wealth
Corporate Wealth
Roles & Impacts
More invested in day to day
Business
Personal Expertise
Attract other investors (Network-social Capital)
Long-Term commitment
Less likely to accept mistakes
Impacts
Invest in a lot of business – conflict of interest
Have an impact on business if they exit early
MDV
Angels
Mix
Advantages
A board
Large sum of money
Company rather than individual
Large number of contacts
Willing to invest in early stage
Have experience
Large number of contacts
Hands on or hands off
Advice/guidance from numerous sources
Many connections
Large sums invested
Disadvantages
Not keen on small startups
Shorter time frame
Small sums of money
Only one individual
Little time if interested in numerous companies
Large amounts of equity given up
Different time frames for exit
Different goals
Recommendations:
We recommend a mix of angel and super angel investors in order to obtain large sums of money, lots advice and guidance from experienced entrepreneurs and gain contacts, willing to invest in early stage- seed and series A investing.
No legal papers and contracts, easier to back out if things don’t work out as expected.
Go with VCs
Kumaran is starting his next venture, Punchtab, after he left his successful startup, YouSendIt. PunchTab is an internet-based customer loyalty program offering website owners and mobile application developers a tool to reward customers based on desired activities. In the past early stage financing was given to startups in order to assist them with their early R&D, development of prototype and building teams. Although the
Difference between Angels and VC investors (goals, sources of funds, roles and impacts)
Angel Investors
VC Investors
Goals
Fund Early Stage
To be mentor in the venture
Usually interested in the industry
Prefers short-term exit
Fund Later Stage Deals
Wants big exit
High return expectation
Source of Funds
Personal wealth
Corporate Wealth
Roles & Impacts
More invested in day to day
Business
Personal Expertise
Attract other investors (Network-social Capital)
Long-Term commitment
Less likely to accept mistakes
Impacts
Invest in a lot of business – conflict of interest
Have an impact on business if they exit early
MDV
Angels
Mix
Advantages
A board
Large sum of money
Company rather than individual
Large number of contacts
Willing to invest in early stage
Have experience
Large number of contacts
Hands on or hands off
Advice/guidance from numerous sources
Many connections
Large sums invested
Disadvantages
Not keen on small startups
Shorter time frame
Small sums of money
Only one individual
Little time if interested in numerous companies
Large amounts of equity given up
Different time frames for exit
Different goals
Recommendations:
We recommend a mix of angel and super angel investors in order to obtain large sums of money, lots advice and guidance from experienced entrepreneurs and gain contacts, willing to invest in early stage- seed and series A investing.
No legal papers and contracts, easier to back out if things don’t work out as expected.
Go with VCs