Finding Genius: Venture Capital and the Future it is Betting on

Once an investment is made, the rough outcomes (averaged from several independent studies of angel returns) are: 50 percent eventually fail completely. 20 percent eventually return the original investment. 20 percent return a profit of 2 to 3 times the investment. 9 percent return a profit of 10 times the investment. 1 percent return a profit of mo

My own data on billion-dollar companies shows that more than 90 percent were venture backed. The rest either were bootstrapped, meaning they did not raise VC funding and grew on their modest profits in the initial years, or were self-financed through founders who had the means to invest in their own companies.

VC funds can vary widely in the returns on their investments. Although the top VC funds generate extraordinary returns, the average one does not. For the VC funds that were launched in 2009, after ten years, the top 5 percent had yielded exceedingly higher returns than the stock market (S&P 500), but the median fund had a similar or lower retur

Jeffrey Sohl, the director at the Center for Venture Research has been tracking the angel investor market for over 35 years. Data from his 2015 report shows that the average angel deal size in 2015 was $345,390 with an average post-money valuation of $2.32M, this means angels were typically getting about a 15 percent stake in early stage companies.