Getting Money From an Angel Investor Doesn't Mean His or Her VC Firm Will Invest in Your Company In fact, it may indicate the opposite.

If the success of companies like Apple and Genentech was responsible for making tech a worthwhile investment and giving rise to the era of venture capital, it could be argued that later companies like Netscape and Google created today's golden age of angel investors--those who plow their new wealth back into their industries.

But how is an angel investment from Netscape co-founder Mark Andreessen different from one brokered by his venture firm, Andreessen Horowitz? It's an important distinction; an understanding of the rationale and potential conflicts for angel investments is crucial for entrepreneurs who are out pounding the pavement for dollars.

Angel investing has morphed significantly in the past decade. Angels used to be organized groups specific to a region or cause consisting of people who were interested in speculating on startups--think a neighborhood investment club on steroids. Often these investments had an economic development component or a sense of giving back to communities.