Many people – quite rightly – ask what returns they should expect from angel investment. At this year’s USA angel conference in San Francisco, Scotland’s Professor Richard Harrison from the University of Edinburgh’s Business School gave a thorough data-based overview of angel portfolio returns.
His key points were:
– annual returns (IRR) vary from 17% to 37%.
– 50 is the magic number as only at this portfolio size does the risk of an IRR of less than 10% fall below 20%.
– for portfolios below 20 companies 30% show a negative IRR but 20% generate returns of over 75%.
His presentation can be found here.