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There's a section of this article which computes an average hourly wage of ~$40/hr as the expected return on an angel portfolio of $500k which takes 2,500 hours
by arbuge 5y ago
There's a section of this article which computes an average hourly wage of ~$40/hr as the expected return on an angel portfolio of $500k which takes 2,500 hours to assemble and earns a return of 20%. This seems to be missing the point that the 20% estimate is an annual return, and not a one-time deal, once this portfolio is assembled. Theoretically it goes on for an indefinite time as the overall portfolio increases in value.
Great article otherwise... by the way, minor nitpick here:
> Some angel investors lose 100% of their principle.
Should be "principal", although some might cynically argue that the typo makes this even more true!
- gsaines 5y agoThanks so much for the edit, arbuge, just updated my typo. For the first point, that's actually quite an embarrassing oversight if I've misunderstood. In the books I read, I understood that the expected return was total, not yearly. So the standard math is that you get 20% of $500k PER YEAR? If so, gotta update the math on this one - the outcomes are radically different than what I report.
- deleted 5y ago[deleted]
- lifekaizen 5y agoYeah the standard returns data would be annualized, for example "average return ... in this study is 2.6 times ... in 3.5 years — approximately 27 percent [IRR]" http://www.angelcapitalassociation.org/data/Documents/Resources/AngelGroupResarch/1d%20-%20Resources%20-%20Research/6%20RSCH_-_ACEF_-_Returns_to_Angel_Investor_in_Groups.pdf http://www.angelcapitalassociation.org/data/Documents/Resour...
- arbuge 5y agoAround $320/hr then (less the discount you'd have to take for tying up your capital over that timespan). Not a bad deal for many people, and you can make proportionately more on this per hour basis if you are able to contribute more capital to begin with.