At the Individual Level: Outlining Angel Investing in the United States

Posted: 24 Nov 2009

See all articles by Robert Wiltbank

Robert Wiltbank

Willamette University - Atkinson Graduate School of Management

Date Written: 2005


Although angel investing is the single largest source private equity capital source for new ventures, virtually no studies about the outcomes of angel investors in the United States exist. Over the course of two years, a survey of 106 angel investments engaged in 917 investments and 335 exits from those investments was conducted to help fill this gap in investment research. Roughly half of survey respondents had invested in software and information technology startups, and the source for 40 percent of their investments was personal relationships.The average respondent had founded three ventures and worked for more than 13 years as an entrepreneur. They held $1.3 million in six new venture investments. According to the survey data, 23 percent of the 917 investments were considered successful. Of the 335 exits, nearly 50 percent resulted in a complete loss of invested capital.The average rate of return was 10 percent. Taken together, the data suggest that investing at seed stage is associated with reduced failure rates; indeed, such early stage investments leveraged the unique talents of the respondents. Other variables were also explored.Among these:the presence of prior investors makes investment outcomes, favorable and otherwise, more extreme. (SAA)

Keywords: Rates of return, Social networks, Investments, Startups, Angel investors, Closing firms, Early stage financing, Investment performance

Suggested Citation

Wiltbank, Robert, At the Individual Level: Outlining Angel Investing in the United States (2005). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN:

Robert Wiltbank (Contact Author)

Willamette University - Atkinson Graduate School of Management ( email )

900 State Street
Salem, OR 97301
United States
503 370 6955 (Phone)
503 370 3011 (Fax)

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