First of all, an angel investor is not going to invest $5 million in a
start up. A typical angel investment is in the range of $25,000 -
$100,000, and even when banding together in groups, a typical complete
angel round (usually consisting of four to six angels) would still be
only in the range of $250,000 - $750,000. Indeed, $5 million is even a
pretty big chunk for a first round investment from a venture capital
firm, which is investing a large pool of institutional money.
That said, both angel investors and VCs would typically hope to get a
10x return within five years or so. In your terms, "a good exit for an
angel investing 5M on a high risk venture would be $10.00 for every
$1.00 invested after taxes"...or, put another way, something in the
$100,000,000 range.
A good source of information on financing entrepreneurial ventures is
the eVenturing site from the Kauffman Foundation, at
http://www.eventuring.org, and the primary site for angel investors is
the Angel Capital Association, at
http://www.angelcapitalassociation.com/ (click on the Directory tab).
Good luck! |