Genuinely curious how this works for an angel investor if the failure rate is 95%. How many companies do you have to invest in in order to spread the risk of that 95%?
They're sort of like guys buying lottery tickets, except the ticket costs more than most houses.
Vc Funds are plying the same game but on an industrial scale. So they get more average returns. Maybe better on average but maybe not for their investors as fees eat into that.
An angle with very deep pockets is probably more like a mini VC fund than an angle. They'll hire people to find and vet investments and maybe pool capital to spread costs and risks.
You'd need at least 20 investments to even think about maybe beating that 95% failure rate, that seems like a very high number of investments for one person to find, evaluate, fund and wait before the 95% catches up to you.