Expected Returns to Stock Investments by Angel Investors in Groups

Ramon Degennaro and Gerald Dwyer

European Financial Management, 2014, vol. 20, issue 4, 739-755

Abstract: Previous research calculates realised internal rates of return on angel investments but does not estimate expected returns. We present the first estimates of expected returns on angel investments by applying a consistent statistical framework to a new data set. Our sample spans 1972 to 2007 with 419 exited investments. Our results suggest that expected returns on stock for angel investors in groups are about 70% per year in excess of the riskfree rate. These expected returns have a large variance and are heavily skewed, with many losses and occasional extraordinarily high returns.

Date: 2014
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https://doi.org/10.1111/eufm.12002

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Working Paper: Expected returns to stock investments by angel investors in groups (2010)
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