Latest US Study Tracking Angel Returns presented at ACA Summit Philadelphia
“Winning is faster, losing takes a very long time” is the verdict of Professor Rob Wiltbank who presented the results of The Angel Resource Institute 2016 study of Angel Returns at the ACA Summit, Philadelphia last week. The study was the largest on angel investing returns in North America since 2007, funded by the Ewing Marion Kauffman Foundation and the NASDAQ OMX Education Foundation.
This study benchmarks against the previous review of Exits and Returns carried out in the US in 2007 and also “Siding with the Angels” the 2009 study made of the UK market.
The data was taken on firms from the original Halo study and also tracked Angel sidecar or managed co-investment funds
Highlights of the Tracking Angel Returns 2016:
- 91% of the exits in this study occurred between 2010 – 2016.
- The investment holding period increased by a full year, to 4.5 years on average.
- The failure rate, exits at less than a 1X return of capital, increased to 70% of all outcomes, up from 52% (56% in UK).
- Bigger wins commonly took 9 or 10 years to complete and biggest winners take a very long time to achieve – 15 years.
- The cash on cash multiple works out to 2.5X.
- The overall IRR is approximately 22%, compared to 27% in the earlier US study and 22% in the UK Study
- 10% of exits provide 85% of the total return in 2016 and most deals are in 1-5x return.