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.
In case you’ve still not watched Angel Investing 101, we start with a very quick recap to set the stage for 201.
The most common structure for startup investments is equity.
The second most common structure is debt.
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.
One alternative form of finance is based on sharing revenues. For an in-depth overview of this structure, see California Capitalism.
For philanthropic investors, one up-and-coming alternative structure is recoverable grants.
Back on the for-profit side, yet-another alternative is permanent capital.
Finally, Angel Investing 201 finishes up by looking at when each of these structure is commonly used within the lifetime of a startup.