Monday, 6th of July 2009 at 02:56:50 PM
This beauty comes our way courtesy of Hall Martin, former executive director of the Central Texas Angel Network (CTAN) and current director of the Austin Entrepreneur Network. In this piece, Hall summarizes an interview with John Huston, who is the current president of the Angel Capital Association, in which he outlines the ten possible outcomes of an angel investment. Awesome stuff!!!
What I find fascinating is that the math supports his findings in that historically, somewhere between 1-2 deals out of ten (I recall seeing a Kauffman report claiming around 15% but I cannot seem to track it down again) make up all of the return that venture and angel investors make. Perhaps this might shed some light on the capital raising process for entrepreneurs and help them understand why the cost of equity is so high and very hard to close.
Great post by Hall Martin, the original podcast is even more entertaining. I especially like the “Harry Houdini.”