"The majority of angel investors I know have lost money investing in startups."

David Cummings’ post are always thought-provoking. His post a few days ago (about revenue-based financing, followed-up last week) started off in an interesting way.

  • “Investing in startups is a great way to lose money.”

  • “The majority of angel investors I know have lost money investing in startups.”

Is that really true? Can that be true and the studies of the returns for angel investing (like those described by us here) be accurate? And what about me: have the majority of angel investors I know lost money investing in startups?

I don’t know the same angel investors as David, so I can’t answer the first two questions. But the introduction made me wonder if data are available on the proportion of angel investors that lose money. I don’t know of, and haven’t found, any studies specifically about that.

So, to try to quantify the “risk” of angel investing in a new way, here are some data from the first decade at VentureSouth to answer the last question: have the majority of angel investors we know lost money in startups? Posts coming over the next few days will answer that.

And if you would like to share your results with us, publicly or privately, we would love to help add this dataset to the expanding data available on other aspects of angel investing.