This story appears in the May 2025 issue of Utah Business. Subscribe.
You’ve probably heard about startups that took off and wondered, “What if I had gotten in early?” If you’re used to investing through a 401(k), venture capital might feel like it’s for Silicon Valley and the ultra-wealthy — not regular investors. However, it’s not out of reach. You just need to meet the U.S. Securities and Exchange Commission’s accredited investor criteria and become an angel or limited partner (LP) in a venture fund.
Angel investor versus LP: What’s the difference?
Both angel investors and LPs invest in early-stage startups, but there are key differences. Zeni CRO Megan Prince, who recently jumped into becoming both an LP and angel, shares her experience:
- Limited partners invest ($50,000 to more than $1 million) in VC funds, and managers decide where to place bets. Returns depend on the fund’s performance. Money is auto-diversified and locked in for 5 to 10 years.
- Angel investors pick individual startups and write checks ($5,000 to $200,000). Returns depend on the company’s success.
If you like stock picking, becoming an angel may excite you. They analyze trends, compare companies and ultimately decide where the money goes. But that doesn’t appeal to everyone.
“I prefer being an LP in a venture fund,” Prince says. “Angel investing can be time intensive. You need to source deals, conduct due diligence, negotiate terms and track investments. Venture funds do that on your behalf.”
Angels do more legwork than LPs, so their exits may be larger, but Prince thinks the tradeoff is worthwhile.
“My capital in a venture fund is spread across multiple startups, reducing risk,” she continues. “As an LP, I’ve also felt that I’ve had access to higher-quality deals. They leverage their network to get into competitive, oversubscribed rounds.”
Accreditation and getting started
There’s no formal process, certification or piece of paper that states you’re an accredited investor. Instead, companies are required to conduct due diligence themselves. Prince submitted her tax returns, while other organizations may have you check a box to self-certify. The tricky part is finding deals or the right venture firm to join.
AngelList is a good place to start. The platform allows investments as small as $1,000, shortcuts the search for founders by providing a curated marketplace of startups, and even offers diversified venture funds. However, users often complain about how seldom startups provide updates to their investors. If you want relationships with founders, you’re better off sourcing leads from your community or network.
For people who want to be an LP, there are dozens of firms in Utah to look into. Some specialize by sector, others by funding stage, and others even prioritize positive social impact. Where you invest depends on your priorities. The key is to start where you’re comfortable, don’t risk more than you can afford to lose, and surround yourself with knowledgeable investors who can help you on your journey.
