Investment Return Calculator
Calculate and analyze potential returns on your startup investments. Model different exit scenarios, understand risk-adjusted returns, and make data-driven investment decisions.
Investment Details
Return Analysis
Expected Exit Value
$5,600,000
Multiple of Money
28.0x
IRR
203.7%
Investment Breakdown
Exit Scenario
Based on SAAS industry standards and your metrics, this investment could return 28.0x in 3 years. The risk-adjusted return is 460.0% considering the 20% exit probability.
Return Metrics
Absolute Return
$5,400,000
Risk-Adjusted Return
460.0%
Final Equity
7.00%
Understanding Investment Returns
Key Metrics
- • Multiple on Invested Capital
- • Internal Rate of Return (IRR)
- • Cash-on-Cash Return
- • Risk-Adjusted Returns
Success Factors
- • Exit Timing
- • Dilution Impact
- • Follow-on Strategy
- • Portfolio Approach
Angel Investment Calculators
Tools for evaluating startup investments and calculating potential returns.
How to Calculate Investment Returns
Return Calculation Methods
Multiple methods help provide a complete picture of investment performance:
- 1. Multiple on Invested Capital (MOIC) = Exit Value / Total Investment
- 2. IRR = Rate that makes NPV of all cash flows equal to zero
- 3. Cash-on-Cash = (Exit Value + Distributions) / Total Investment
- 4. Risk-Adjusted Return = Expected Return × Probability of Success
Return Expectations
- • Pre-seed/Seed: 10-30x potential return
- • Series A: 5-10x potential return
- • Series B+: 3-5x potential return
- • Portfolio Average: 2.5x return
Investment Return FAQs
What's a good return for angel investments?
Angel investors typically aim for a portfolio IRR of 20-25%. Individual investments should target 10x+ potential returns to account for portfolio diversification and failure rates.
How does dilution affect returns?
Future funding rounds typically dilute ownership by 15-25% per round. Pro-rata rights and participation in follow-on rounds can help maintain ownership percentage.
What's the average holding period?
Angel investments typically require 5-8 years to exit. Early-stage investments may take longer, while growth-stage investments might exit sooner.
How do you factor in risk?
Risk-adjusted returns consider the probability of different exit scenarios. Angel investments have a roughly 10% chance of significant returns, with about 50% resulting in partial or total loss.
What affects exit valuations?
Exit valuations are influenced by market conditions, company growth rate, profitability, strategic value to acquirers, and competitive dynamics in the industry.
How important are follow-on investments?
Follow-on investments can help maintain ownership percentage and support portfolio companies. Plan for 1-2x the initial investment amount for follow-on rounds.
What's a typical exit timeline?
Most successful exits occur through acquisitions (M&A) after 5-8 years. IPOs are rarer and typically take longer, often 8-10+ years from initial investment.
How do investment terms affect returns?
Terms like liquidation preferences, anti-dilution protection, and participation rights can significantly impact returns, especially in downside or moderate exit scenarios.
Maximizing Investment Returns: A Strategic Guide
Understanding Investment Returns
Angel investing is like planting seeds in a garden - some will flourish beyond expectations, others will grow steadily, and some won't survive. Success comes from understanding this distribution and building a portfolio that can capture the outsized returns while managing downside risk.
Return Distribution Analysis
Typical Portfolio Distribution:
- 10% of investments: 10x+ returns
- 20% of investments: 2-10x returns
- 30% of investments: 1-2x returns
- 40% of investments: Partial or total loss
Investment Strategy Framework
1. Portfolio Construction
Key Elements:
- 15-20 investments minimum
- Investment staging strategy
- Sector diversification
- Stage diversification
2. Investment Terms
- Pro-rata rights
- Information rights
- Board observation rights
- Anti-dilution protection
Case Study: Successful Angel Portfolio
Portfolio Overview:
- 20 investments over 5 years
- $1M total invested
- 2 companies returned 15x
- 5 companies returned 2-5x
- 8 companies at 1x or break-even
- 5 companies failed
- Overall portfolio return: 4.2x
Return Optimization Strategy
Deal Selection:
- Large market opportunity
- Strong founding team
- Clear competitive advantage
- Scalable business model
Portfolio Management:
- Regular company updates
- Strategic support
- Follow-on investment strategy
- Exit planning
Risk Management:
- Investment staging
- Due diligence process
- Term sheet negotiation
- Portfolio diversification
Investment Return Benchmarks
25%
Target IRR
10x
Target Return Multiple
6yr
Average Hold Period