Make turn at next exit: a roadmap for startup investing
Angel investors as a whole have done exceptionally well lately. A recent study by Prof. Robert Wiltbank that made noise in the angel scene claims that angel investors make 2.5x their investment in just 3.5 years when diversifying properly – which, if you think about it, is a ridiculous nearly 30% year over year return and more than double the returns of the S&P 500 over that same timeframe. How do angels make money? Angel investors make money when a startup they invested in exits, but what exactly qualifies as an exit? From an investor’s perspective, an exit is an event where the investor realizes gains or losses from original investment through a liquidation event, public offering, or a merger. Sometimes exits are highly profitable events where investors receive a 20 or 30 times return on investment– in the VC/investing world these are called home-runs. However, more often than not, returns from individual startup exits are more modest, or negative, and as such don’t receive press attention. Finally, there are also those exits that startups are notoriously famous for producing and every investor should...
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