Are Some Angels Better than Others?
This paper provides novel, large-scale evidence on the returns to angel investing. Returns are extremely right-skewed: most lose money, the top one percent return more than fifty times invested capital, and the mean investment doubles invested capital. Investor-specific variation is an important part of overall variation in returns. Wealthier investors sort into better firms yet earn lower returns compared to other investors in those firms. Better performing angels have more startup-specific and industry knowledge, founder connections, and engage in active governance. These findings have implications for policies aimed at expanding early-stage finance.
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Copy CitationJohan Karlsen, Katja Kisseleva, Aksel Mjøs, and David T. Robinson, "Are Some Angels Better than Others?," NBER Working Paper 33231 (2024), https://doi.org/10.3386/w33231.Download Citation
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