(My response below, to the above question on Quora)
Different investors participate in different stages of a venture. Angel investors invest at the very early stages – when the founders only have an idea or when the idea is being or has been developed into a prototype. They provide enough capital for the idea to be tested and proven in the market, so that another set of investors can bring in more capital after the model is proven and when the venture needs more money to take the proven model to a wider base.
This next set of investors are VC firms.
Angel investors are individuals who put their own money into startups that they believe have the potential to become large, scalable and profitable ventures. On the other hand, VCs are firms who pool money from other investors and invest in startups.
Angel investors take the maximum risk, as even the concept is yet to be proven, and hence the valuation they get is much lower than what VCs would invest at. By the time the venture is ready for VC funding, the concept and model is generally proven and hence the valuation is higher than the angel round, though the quantum of capital required at the VC stage is higher.
Crowd funding is just another way of getting angel stage funding. Instead of one or two or a group of individual angel investors investing in the venture, in crowd-funding, startups use online platforms to reach out to a larger number of individuals, who usually invest much smaller sums to collectively provide the capital the startup needs.