Angel Investing 201


Time to dive into the details, Angel Investing 201 covers the various structures Angels use to invest in startups. If you’ve not watched Angel Investing 101, go back and watch that first.

Taught by Luni and Joe

In case you’ve still not watched Angel Investing 101, we start with a very quick recap to set the stage for 201.

The stages of startups and matching funding

The most common structure for startup investments is equity.

The structure of equity investments

The second most common structure is debt.

The structure and terms of debt investments

The first capital from Angels into startups is often neither of the above, or both, depending on how you look at it. These are Convertible Notes and SAFEs.

Terms for convertible notes and SAFEs

One alternative form of finance is based on sharing revenues. For an in-depth overview of this structure, see California Capitalism.

A quick overview of revenue-based finance

For philanthropic investors, one up-and-coming alternative structure is recoverable grants.

Common terms for recoverable grants

Back on the for-profit side, yet-another alternative is permanent capital.

Common terms for recoverable grants

Finally, Angel Investing 201 finishes up by looking at when each of these structure is commonly used within the lifetime of a startup.

Common terms for recoverable grants