Angel Investing By The Numbers

And the numbers are not pretty:

  • 3.2x cash-on-cash return for all investments put together (total dollars out divided by total dollars in).
  • Of the companies angels invested in, 63% were complete write-offs for the angels involved.
  • 66% of angels made less than what they invested. 45% generated no return.

To put the numbers in context, please read the full article. As the author pointed out, there is some reason to believe that the data may have a slight bias towards negative returns as 50% of investments happened between 1995 and 2000.

So why do I keep investing? I think it boils down to these two reasons. One, I am an optimist who believes that over the long term tech is an attractive investment play. Two, I love meeting and working with people who believe what they do makes a difference. Right now I am having fun. Hopefully at some point I will see the money again, and then some.