Why Angel Investors are so Sought After

A great many new ventures are NOT businesses.

They don’t yet know customers, have a business model, nor see a clear path to making money.

We refer to these as “startups”

Startups are distinct from new businesses (and new businesses are not necessarily startups) in that the business model is NOT known.

This means such ventures are taking great risk. Such ventures are KNOWN to fail at a very high rate. Notably…

90% of all startups fail.

About 54% of all “new business” fail.

And by the way, even with funding, about 70% of all funded startups, still fail.

Frankly, we don’t really have any precise idea of how many businesses fail but these are pretty reasonable approximations drawn from all the studies done blended with some conventional wisdom and commonly cited norms.

Startups are rather like society’s version of R&D (research and development). Companies spend billions of dollars every year to research and try new products and solutions.

Most of those efforts fail.

And I’m sure you’d agree that companies won’t solve every problem… and we certainly can’t look to our governments to be innovative and fuel those risks and efforts… so what does our economy do??

We start startups.