Angel. Angel investors are individuals who provide capital to one or more startup companies. These individuals are affluent and/or have a personal stake in the success of the venture. They look for higher risk opportunities which in turn can provide a higher return than more traditional investments. Funding estimates vary, but usually range from $50,000 to $1.5 million. Pre-Seed. Pre-seed capital is financing used to assist in the initial product development. This capital helps entrepreneurs finish their design and begin to develop the first specifications and prototypes. Seed. Seed capital is the second stage financing and is normally used for the initial investment in a project or startup company, for proof-of-concept, market research, or initial product development. This initial amount is usually quite small because the venture is still in the idea or conceptual stage. Venture Capital. Venture capital, also known as risk financing, is generally made available to approximately 10% of startup firms and small businesses with exceptional growth potential. Most venture capital funds come from an organized group of wealthy investors. This form of raising capital has become increasingly popular among new companies that, because of a limited operating history, cannot raise money through a debt issue. The downside for entrepreneurs is that venture capitalists usually have a say in the major decisions of the company in addition to a portion of the equity. Bank. A bank is a financial institution that is in the business of raising capital for corporations and municipalities. Banks can also provide commercial loans where a lender gives money to a borrower, and the borrower agrees to repay the borrowed money along with interest at a predetermined date in the future.

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