Angels are the largest source of seed and start-up capital for businesses. They are wealthy groups or individuals who are very picky about the businesses in which they invest. Angel investors tend to fund small businesses for longer periods of time and expect a lower return on investment than do venture capital firms.
Venture capital firms, on the other hand, generally fund companies with significant growth potential not small businesses. They provide equity for businesses and expect high returns on their investments within three to five years.