Angel Investing by the Numbers
FastIgnite's Simeon Simeonov published this article a few days ago and it continues to attract a lot of attention. In case you missed it:
"With high-tech companies needing less capital due to advancements in technology, startup development methodology and online marketing, we have seen a Renaissance in angel investing. While angel investors participate in part for the excitement of engaging with entrepreneurs and placing bets on the future, they also do it for the expectation of significant financial returns. Various studies of angel investing published in the last decade estimate aggregate returns to angels on the order of 18-37% per year, well above market. The catch is that 50-70% of angels make less than what they invest. Returns are very unevenly distributed and this begs the question to what extent is portfolio theory fundamental to angel returns."Continue reading "Angel Investing by the Numbers"
Comments
Sobering statistics.
But... pretty much in line with what the Kauffman Center and the Angel Capital Association has been saying.
Lessons:
* buy low... sell high - duh
* diversify, diversify, diversify...
* don't be an amateur angel. If you don't plan to do at least 5-10 investments (or even better 15, 20, 25, 30), don't do it at all
Still... given the VC meltdown, I think now is a good time for angels. Oppy to buy low and sell high. Oppy to build a diversified portfolio.
We will see.
Posted by: Roy Martinez | July 8, 2010 8:42 AM