Don’t say it too loud, but angel investors get a better bang for their buck than their venture capital peers. A study released by the Ewing Marion Kauffman Foundation and conduced by Robert Wiltbank of Willamette University and Warren Boekr of the University of Washington, found that the internal rate of return for the average angel investor has been a heavenly 27% in 3.5 years, which the authors say “compares favorably” with the IRRs of other types of private equity investment. The average figure, however, doesn’t really tell the whole story. The study found that 52% of all exits actually return less than the capital originally invested, while 7% of the exits enjoyed returns that were more than 10% their investment, and those entities accounted for 75% of the total return dollars. The research, considered the largest on angel’s financial returns, made some other thoughtful observations. For example, it found:

• The more hours angels spent on due diligence, the greater the returns;
• The more expertise the angel had in the industry of the investment correlated positively with returns;
• Angel investors that interacted with portfolio companies at least a couple times a month “by mentoring, coaching giving les or monitoring performance” resulted in higher returns.

Now as for the silent treatment regarding venture capital, Seattle Post-Intelligencer reporter John Cook on his venture blog noted that the study didn’t compare angels with the later-stage venture capital, whose IRR is a comparatively anemic 10% on its investment. Witbank told Cook that the study drew no comparisons to VC at all because they didn’t want to “pick the fight,” but said, “There’s no question that the data I have, angel investors outperform the vast majority of venture capitalists.”