Difference between Angel Funding, Seed Investment & Incubation

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My Answer to the Question on Quora.

Is there any difference between angel funding, seed investment and incubation?

Quite some,
1. Angel Funding

Mostly experienced individuals investing in personal capacities. This might by alone or in a syndicate (more often). Typical size of investment can be anywhere from $10k to $1mn. Sweet spots are $100k-400k. They tend to not care so much about control and would love to help whenever they could.

2. Seed Funding

Techinically, its a word given to first round of investment. That said, practically, people have started using it as a term for a formal pre-series A round. This could be through angels or VCs putting in a small check (compared to their typical size). Typically its a sub $2mn round.
I guess the way I look at it….if a proper due diligence is done, people involved are professional investors, and its a formal process, I would call it a seed round.
On the other hand….in an Angel round, the angel might have just talked to you on the phone and sent a check the next day.

3. Incubation

Typically much lesser money (sub $100k) and a lot of focus physical space, connecting to mentors, classroom-kind-of activites, etc. Mostly associated with startups which are probably pre-Seed Funding stage.

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That said, if you are a founder, dont let this bother you. Fundamentally money is money; and support is support. Figure out how much of what you need and who can provide it to you better. And dont worry about what name you give it.

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