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More on Increasing Your Chance of Success as an Entrepreneur

December 9th, 2007 by Jacob Ukelson

An interesting study was published yesterday by the Kaufman Foundation on “Returns to Angel Investors in Groups” which did a large scale study on the returns of angel investment groups in seed and early stage investments.  The main conclusions are:
1. Due diligence time: More hours of due diligence positively relates to greater returns.
2. Experience: An angel investor’s expertise in the industry of the venture in which they invest also is related to greater returns.
3. Participation: Angel investors that interacted with their portfolio companies at least a couple of times per month by entoring, coaching, providing leads, and/or monitoring performance.

 Points 2 and 3 are the most relevant to enttrepreneurs (as long as they decide to invest, who cares how long the DD takes - as long as it is reasonable). The charts below summarize the two main points on the value of angel expertise and experience in providing value to both the entrepreneur and their investors:

Impact of Angel Participation

Impact of Industry Expertise

These numbers back up the my previous claims in “Increasing Your Chances as an Entrepreneur” - anything you can do to get experienced professionals willing to take an active role as part of your team - do it, it will greatly enhance your chances at success.

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One Response to “More on Increasing Your Chance of Success as an Entrepreneur”

  1. entrepreneur Says:

    Here is a very interesting blog and a beautiful report generated by kauffman on the returns of angel investors with a very good conclusion.

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