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Follow-on Funding: A Dilemma for Angel Investors

February 1, 2012 /

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In 2007, Professor Rob Wiltbank reported in Returns to Angel Investors in Groups that angel investors made follow-on investment in about 30% of their invested companies. It was surprising for me to learn that follow-on investments correlated with lower returns, that is, angels that made follow-on angel investments saw returns of 1.4X their investment, while those that did not make follow-on investments enjoyed 3.6X returns. The time to exit for both groups was similar.

By Bill Payne

Full Story: http://gust.com/angel-investing/startup-blogs/2012/01/31/follow-on-funding-a-dilemma-for-angel-investors/

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