One cause is the tax benefits. If you're selling qualified small business stock, you can defer gains by rolling them over into new qualified small business inve

One cause is the tax benefits. If you're selling qualified small business stock, you can defer gains by rolling them over into new qualified small business investments, within a certain time window. That's a pretty big tax preference, and it means that even if you don't do an amazing job of angel investing, you might be better off than taking the money, paying tax on the gains, and investing it in real estate or the stock market.