A common complaint amongst angels is the lack of good investment opportunities. We wanted to learn if this was a valid concern for the Open Angel Portfolio (i.e., the companies that have pitched at Open Angel). To answer this question we estimated the growth in “value” of the OA Portfolio companies and compared it against:

  • industry standards for funds
  • the Dartboard Index: an estimate of growth in value of a random selection of companies that applied to pitch at Open Angel, including some that got accepted.
  • another angel fund who graciously shared their data with us

Measurement of Performance

We used the VC industry’s standard measure of performance - internal rate of return (IRR). However, the standard IRR calculation uses data from actual exits (time to exit, value of exit), which we don’t have. (Our portfolio companies are, by definition, early stage and we have been doing this for only 2 years.)

We adjusted the calculation to account for this difference.

  • We assign a current “market value” to each company, using a mix of methods:
    • preferred method: value as determined by the last financing round
    • also look at revenue growth, employee growth, and the CEO’s estimate of value
  • We try to be conservative; we routinely discount founder estimates.
  • We assume that these values are liquid.

The result is the answer to the question, “If we could liquidate the entire OA portfolio today and receive market value, what would the resulting IRR be?”

Data Collection and Processing

We sent a survey form to the 46 portfolio companies. 40 responded with data about their current valuation and we estimated data for another 4. The remaining 2 non-respondents were excluded from the analysis.

  • We modelled a fixed “one unit” investment in each of the 44 companies, with the investments spread out over the 4-month period following the relevant pitch event.
  • We used the valuation reported or estimated for each company to determine the value of the investment on the liquidation date, 31 August 2016. All investments were “liquidated” on the same day.

Calculating an IRR is straightforward. For the OA Portfolio:

OA Portfolio IRR = 80%

VC funds typically aim for a lifetime IRR of 30%. These results are most meaningful when compared against other portfolio IRRs calculated in the same way:

  • Dartboard Index IRR = 0%

  • other angel fund IRR = 20%



  1. Qualitatively, the result reflects a “classic” angel portfolio – about half of the contribution to the OA Portfolio IRR comes from the top three companies.
  2. The result is slightly sensitive to the timing of the investments: different (reasonable) models for the investment dates change the result by as much as 10%. We conclude from this that the IRR calculation is uncertain by at least this amount and perhaps more, owing to the uncertainty in each company’s current real value and how this will evolve over time.
  3. The above results don’t take into account EBC tax credits. Doing so would increase the IRR by 40% (1/0.7 = 1.4).
  4. None of the companies in the last cohort have had much time to gain value, even on paper. If we remove the last cohort from the analysis we find IRR = 110%.