New research shows angel investors make an average of 14.7% return when investing into startups
by Startacus Admin
Envestors, the marketplace for early-stage investing, has just announced the results of its research into the Real Returns of Angel Investing.
Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through its own private investment club. The business, which has matched £100m+ of investment into over 200 companies, is regulated by the FCA and supports investors with deal flow and full detailed information on every deal via its platform.
They carried out an analysis of the portfolios of nearly 50 experienced angel investors found a weighted average Internal Rate of Return (IRR) of 14.7%.
Of the £75.4m invested by study participants, the value of exited and existing portfolio companies totalled £208.5m*, resulting in a gain of £133.1m.
Figures exclude the tax benefits offered by the Seed and Enterprise Investment Schemes, which when tallied would increase the results.
The portfolio across participants included over £75m in investments in over 1,660 early-stage businesses.
89% of respondents showed a net gain
11% of respondents showed a net loss
173 of the businesses had exited while 368 had failed and 1,119 were still in play
Participants were required to have invested a minimum of £250k in at least five companies over a ten-year period. Results, therefore, reflect the average returns of private investors who have built a portfolio of early-stage investments over time.
Oliver Woolley, CEO of Envestors and an active angel himself said, “The results are really enlightening. Angel investing is known for being high risk, but what the study is clearly showing is that it can be very lucrative. We’ve been helping to match companies and investors for nearly 15 years, and we’ve had our share of winners and losers. What’s clear is that if you approach investing carefully, work with a regulated network and build a diverse portfolio, it can pay off.”
When asked for advice, study participants offered the following:
‘Spread your risk, recognise that many will fail (including those you rated as relatively low risk), and crucially, remember the time for the successful ones to provide an exit opportunity is many times longer than predicted by the company at the time you first invest.’
‘Meet the CEO. If you’re not seeing the CEO, there’s a big problem.’
Lastly, they stressed the importance of strong leadership teams, ‘The entrepreneur(s), are they leaders, driven, committed, experienced Do they have the qualities necessary to build a large and successful business?’
Subscribe to our newsletter
If you would like to receive our startup themed newsletter, full of the latest startup opportunities, events, news, stories, tips and advice, then sign up here.
The lowdown on Manchester-based startup Sticky and its innovative no-code solution to help businesses turn any physical space into an engagement opportunity.
Tobin Capital continues to expand its portfolio by investing in pop-up marketplace Sook, the startup on a mission to revolutionise the high street.
Sodexo and L Marks open call for applications from innovative startups and scaleups to join their inaugural Sodexo Healthcare and Seniors Accelerator.
The group payments solution that's better for businesses and customers alike, thanks to innovative fintech startup Hands In.
The lowdown on FuturePlus, the startup that's on a mission to make sustainability accessible, achievable and affordable for all businesses.
.jpg)
John McLachlan, author and co-founder of Monkey Puzzle Training & Consultancy examines the differences between action-oriented and reflective leaders and which approach is best.
The fitness app that's not just about physical fitness; GoJoe helps employers to engage, motivate and connect their people across all pillars of wellbeing.
Now in its fifth year, North West England water firm United Utilities opens call for Innovation Lab, its pioneering ideas incubation programme.
Not-for-profit OneTech has spunout from Capital Enterprise to expand its offering and continue its mission of creating a more equitable, diverse and supported startup ecosystem.
London-based startup Deep Render tackles the internet’s data and bandwidth challenges via its innovative AI-powered file compression technology.
Published on: 18th February 2022
If you would like to enable commenting via your Startacus account, please enable Disqus functionality in your Account Settings.
- Startup Sook Receives Investment from Tobin Capital 24th May 2023 Tobin Capital continues to expand its portfolio by investing in pop-up marketplace Sook, the startup on a mission to revolutionise the high street.
- L Marks Seeking Startups and Scaleups for Sodexo Healthcare and Seniors Accelerator 23rd May 2023 Sodexo and L Marks open call for applications from innovative startups and scaleups to join their inaugural Sodexo Healthcare and Seniors Accelerator.
- United Utilities Innovation Lab launches call-out for innovative ideas for fifth programme 18th May 2023 Now in its fifth year, North West England water firm United Utilities opens call for Innovation Lab, its pioneering ideas incubation programme.
- OneTech Spins Out from Capital Enterprise to Support Underserved Communities in Tech Across the UK 18th May 2023 Not-for-profit OneTech has spunout from Capital Enterprise to expand its offering and continue its mission of creating a more equitable, diverse and supported startup ecosystem.
