Angel Returns Take Decade

Andrew Wilkinson shares his perspective on angel investing, highlighting how early successes can be misleading and the true nature of returns in this investment category.

• Early Success Can Teach Wrong Lessons

  • Friend invested in 5 companies, 2 paid 10x within 2 years
  • Led to doubling down on angel investing
  • Saw no returns for next 5-10 years
  • Early wins create false expectations

• Reality of Angel Investment Returns

  • Takes extremely long time to see money back
  • Andrew's first return took 12 years
  • Initial investment: $75 → returned $800
  • Larger investment: $250k → returned $3M
  • But these gains were offset by investing $20-30M more in ventures

• Investment Timing Matters

  • Returns heavily dependent on when you invest
  • 2020-2021 investments particularly challenging
  • Market conditions significantly impact outcomes

• Personal Experience

  • Has barely seen any money back from investments
  • Despite some successful exits, overall returns affected by continued investing
  • Compares it to gambling with slight edge
  • Suggests angel investing is not reliable for consistent returns

The key insight is that angel investing requires extreme patience and early wins can create misleading expectations about the typical timeline and success rate of these investments.