A recent article on the Fortune Small Business addressed this very topic: 

Angel investors operating in organized groups are seeing average returns on investment similar to those enjoyed by venture capitalists, according to a new study. 

The Article went on to say:

Kauffman Foundation and the Angel Capital Education Foundation, the “Returns of Angel Investors in Groups” study claims to be the largest of its kind. The study shows that organized angel investor groups in North America have seen average returns of as much as 2.6 times their initial investment over three and a half years from investment to exit. 


That’s an average internal rate of return (IRR) of 27%, similar to the average IRRs seen by private equity investors such as venture capitalists, who usually get involved in a business at a later stage of growth and are therefore commonly thought to take on less risk.

For the wealthy person, thinking about creating a greater yield from his or her portfolio, this is great news.  Yes there is great risk with angel investing, and it inherently it is unpredictable, but there are certain things that can be done to mitigate risk and you can set up criteria that helps you reduce the emotional element that causes some investors to invest when deep down they know they shouldn’t.

This also speaks to the value of having access to due diligence documents and access to groups of angels or other angels that can help mitigate risk, either because of their knowledge or just the collaboration that comes from multiple investors going in on an investment.

Be Sociable, Share!