Startup Investing

There’s been an interesting back-and-forth occurring on TechCrunch the past couple of weeks about angel investing performance. The Anti-Camp: Angel investors can’t win In this corner, we’ve got Wealthfront’s Andy Rachleff. He penned an article entitled Why Angel Investors Don’t Make Money…. In his post, Rachleff explains how professional venture investors do make money (and at that, a small minority). The winning formula? Those premier venture firms succeed because they have proprietary knowledge of the characteristics of winning companies In his view of the world, there are winners and losers (losers mostly). The few who understand this “proprietary knowledge” make money at the expense of those who don’t. He doesn’t buy the idea that angel investors — without the large infrastructure and different incentive structure from traditional VCs — are taking share from venture capitalists. The Data-Doesn’t-Lie-Camp: Angels do make money Then we’ve got Robert Wiltbank’s Angel Investors Do Make Money. Wiltbank, a professor and angel investor himself, takes a hard look at angel returns via a recent study he published at Willamette University. Wiltbank’s research actually shows that...