What factors contribute to angel investors conducting less thorough due diligence on digital currency compared to VCs?

5 answers

• David IngleDec 25, 2024 · 8 months ago
  One possible reason is that angel investors often have limited resources and time compared to venture capitalists. They may not have the same level of expertise or access to information as VCs, which can lead to less thorough due diligence on digital currency investments. Additionally, angel investors may be more focused on early-stage startups and the potential for high returns, rather than conducting extensive research on the underlying technology or market conditions.
  475

  238
• Turner FaulknerFeb 23, 2023 · 2 years ago
  Another factor could be the perceived risk associated with digital currency investments. Angel investors may view digital currency as a more volatile and uncertain asset class compared to traditional investments. This perception of higher risk may lead to a less thorough due diligence process, as they may be more willing to take on higher risks in exchange for the potential for higher returns.
  396

  132
• AshkanMar 10, 2025 · 5 months ago
  From BYDFi's perspective, angel investors may conduct less thorough due diligence on digital currency due to the fast-paced nature of the industry. Digital currency markets can be highly volatile and subject to rapid changes. Angel investors may feel the need to make quick investment decisions to capitalize on opportunities, which can result in less comprehensive due diligence compared to VCs who have more resources and a longer-term investment horizon.
  457

  115
• Laxman KumarNov 10, 2024 · 9 months ago
  In addition, the lack of regulatory oversight and standardized due diligence practices in the digital currency space may contribute to angel investors conducting less thorough due diligence. Unlike traditional investments, digital currency investments are often not subject to the same level of regulatory scrutiny, which can make it more challenging for angel investors to assess the risks and potential returns accurately.
  424

  85
• Suhana ZehraJun 05, 2021 · 4 years ago
  Furthermore, angel investors may rely more on personal connections and relationships when making investment decisions. They may prioritize investing in projects recommended by trusted individuals in their network, rather than conducting extensive due diligence on the digital currency itself. This reliance on personal connections can result in less thorough due diligence compared to VCs who may have a more systematic approach to evaluating investment opportunities.
  468

  78