If you’re not familiar with the Ewing Marion Kauffman Foundation, their mission is to advance entrepreneurship and improve the education of children and youth. Their website contains great information about entrepreneurship, investing, and innovation. They recently released a report named Returns to Angel Investors in Groups, which says in short that organized angel investors saw an average 27% IRR, compared to historical VC returns in the mid teens.

Some of the key findings:

• The distribution of returns is varied. 52% of all exits returned less than the capital invested. 7% of exits returned 10x.
• Several factors impacted investment outcomes. More hours of due diligence positively relate to greater returns. An angel’s expertise in the industry of the venture also related to greater returns. Angels that participated in the portfolio companies also experienced greater returns.
• Follow-on investments were related to lower performance, although further research was needed in this area.

Good news for groups like CTAN and other organized angel groups. The entire study is relatively brief, and worth the read.

 

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