Glossary of Investor Types

Article author
Crunchbase Staff
  • Updated

Go ahead and search for whichever investor type you like on search to find examples of each investor type.

Accelerator: An accelerator takes a set amount of seed equity from a number of young startups in exchange for capital and mentorship. Accelerators will bring a cohort of start-ups in what is typically an on-site program which lasts for three to four months.

At the end of the program, companies will ‘graduate’ from the accelerator program, and may present their company in front of potential investors at the respective accelerator’s Demo Day.

Angel Group: An angel group is a network of angel investors who invest collectively in small startups or entrepreneurs. They typically invest in angel, seed, and sometimes Series A rounds.

Corporate Venture Capital: A corporate venture capital firm is an arm of a corporation, where the investment funds come from the corporation, providing capital to invest in innovative start-up companies.

Co-Working Space: A co-working space is a company that provides a shared working environment for teams working typically for different employees, typically in an office. No equity is taken from companies that work in a co-working space.

Entrepreneurship Program: An entrepreneurship program is a more broadly structured initiative that works with founders to advise, provide either monetary or non-monetary resources, and grow new startups. It does not necessarily take equity or place specific requirements on its companies.

Additionally, the emphasis weighs more heavily on mentorship and learning and does not have a unified cohort structure across most programs in the way that accelerators or incubators do.

Family Investment Office: A family investment office is a fund of an ultra-high-net-worth investor family. They typically do one-off investments.

Fund of Funds: A fund of funds is an investment strategy where firms will hold a portfolio of other investment funds rather than investing directly in bonds, stocks, or other types of securities.

Government Office: A government office may invest in startups in their municipality, district, state, or country. They may or may not take equity in companies in exchange for capital and/or mentorship.

Hedge Fund: A hedge fund is a private investment partnership that invests for wealthy individuals or institutions. They will typically invest in private equity rounds, or late stage venture rounds (Series D or beyond).

Incubator: An incubator brings in an external team to manage an idea that was developed inside the incubator. An incubator will also take a larger amount of equity in contrast to accelerators.

Investment Bank: A bank that purchases newly issued shares and resells them to investors. When they do invest directly in companies, it will typically be in Post-IPO Equity or Private Equity rounds.

Micro-VC: A micro-VC invests in startups and typically has a fund size less than $100M. Micro-VCs are a type of Venture firm that focuses on early stage seed and Series A investments.

Pension Fund: A pension fund is an employer-sponsored plan or fund that provides retirement income for employees. Typically, employers contribute to a pension fund account, tax-deferred, over time. Employees are then able to receive pensions through withdrawals at retirement.

Private Equity Firm: A private equity firm is an investment management company. When they do invest in startups, it is typically in the private equity, or later stage venture rounds (Series C and beyond).

Secondary Purchaser: A secondary purchase is a purchase of stock in a company from a shareholder rather than a purchase of stock directly from the company. This can happen before a company goes public, and is typically not publicized.

Startup Competition: Startup competitions are held by a variety of companies, government offices, and firms. The prize for many startup competitions will be capital with no equity component.

Syndicate: A syndicate is a group of lenders who form to provide what’s usually referred to as a “syndicated loan” to a borrower. Forming a syndicate is advantageous because it spreads the risk among multiple lenders and the borrower (most likely a company, government, or special project) can carry out a transaction it wouldn’t be able to on its own.

University Program: Many universities have programs dedicated to entrepreneurship. Their services range from supporting entrepreneurs with capital or mentorship.

Venture Capital: Venture Capital firms invest in startups at a variety of stages, ranging from seed to Series A and beyond. Venture Capital firms take equity in exchange for capital, seeking to invest in firms from the earliest stage Series A, through to later stages as the company grows. Venture firms typically lead only a single round, and cede to other investors for the next round, to avoid conflicts of interest in pricing the next round.

Venture Debt: Venture Debt firms provide capital in exchange for a loan (plus interest) to be paid back at a later date.

Was this article helpful?

122 out of 152 found this helpful

Have more questions? Submit a request