Angel Fund Returns Analyzed

Local Vancouver Angel Investor Basil Peters passed along an interesting study this week on Angel Investors and Angel Fund returns. The first large scale study on angel investor returns was just published by the Ewing Marion Kauffman Foundation and the Angel Capital Education Foundation. The study analyzed results from 86 organized angel investor groups throughout the United States, involving 539 individual angel group investors who have experienced more than 1,130 exits in which companies that had received the investments were acquired, went public, or were closed. The results showed that exits on average generated 2.6 times the invested capital in 3.5 years from investment to exit and that angel investors achieved an average 27 percent internal rate of return on their investments.

While angel investors invest about the same amount of capital as venture capital funds every year (around $25 billion in the US and $3 billion in Canada), there has been a lack of information on angel returns in comparision to venture capital. This Kauffman study promises to shed some light on early stage investment.