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Angel Investors Do Make Money, Data Shows 2.5x Returns Overall

I began studying angel investing returns about 10 years ago as a result of a problem I couldn’t resolve: The investing world seemed certain that angel investors were rubes. Conventional wisdom dictated that they made reckless investments in very early-stage ventures mostly doomed to fail. And whenever they might come close to succeeding, savvy “professional” investors would just swoop in,

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The reality of returns on angel investment

Editor’s note: This was originally a question and answer on Quora, but the community response was so significant we decided to syndicate it on our Gust blog.

Q: If I want to invest $5,000 as a new angel investor into a new company or companies as part of an angel syndicate, what chances do I have of making a profit in 5 years?

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Follow-on Funding: A Dilemma for Angel Investors

In 2007, Professor Rob Wiltbank reported in Returns to Angel Investors in Groups that angel investors made follow-on investment in about 30% of their invested companies. It was surprising for me to learn that follow-on investments correlated with lower returns, that is, angels that made follow-on angel investments saw returns of 1.4X their investment, while those that did not make

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