Calculate the total return on a startup investment across different exit valuations and holding periods.
Total capital invested
Your ownership percentage at exit (after all dilution)
Acquisition price or IPO valuation
Years between investment and exit
ROI % = (Proceeds − Investment) ÷ Investment × 100In plain English
Proceeds = exit valuation × ownership. ROI = (proceeds − investment) ÷ investment × 100. Annualised = MOIC^(1/years) − 1.
Worked Example
$250K invested, 5% ownership, $30M exit. Proceeds = $1.5M. ROI = 500%. MOIC = 6×. Over 5 years = 43% IRR.
Angel investors deploy their own capital; VCs deploy LP capital and charge management fees plus carried interest (typically 2% annual fee + 20% carry). Net-of-fees VC returns are typically 3–5 percentage points lower than gross returns.
The best angel investors target 100× outcomes on a small number of investments rather than 3–5× on many. The power law means concentration in winners — and picking those winners early — is what drives exceptional angel returns.
| MOIC | Annualised (5 yr) | Classification | Frequency | Status |
|---|---|---|---|---|
0–1× | Negative | Loss | 50–60% of investments | |
1–3× | < 25% | Modest | 20–25% of investments | |
3–10× | 25–58% | Strong | 10–15% of investments | |
10×+ | 58%+ | Exceptional | 1–5% of investments |
Source: Cambridge Associates Angel Returns Study · Kauffman Foundation Report 2024
Ignoring dilution from future rounds
Your 10% ownership at seed may be 5% at exit after two more funding rounds. Model your exit ownership after expected dilution — not your current stake.
Treating all startup investments equally
Startup investment ROI is portfolio-level, not deal-level. One 50× outcome in 20 investments can return the entire portfolio. Never judge an angel strategy by a single investment.
Not comparing to public market alternatives
Startup investments are illiquid for 5–10 years. Your capital could compound in public markets during that time. A 3× return over 7 years (~17% IRR) barely beats a simple S&P 500 index fund.