What is the average closing time to receive financing?

Angel investors say on the average they take 67 days to close while VCs say they take 80 days, a difference of about two weeks. Is this because angel investors don't want to take the time to perform the same careful due diligence that venture capitalists do, or because they realize they do not have the experience or resources to do so? It also may be that angel investors invest at an earlier stage than VCs and have less due diligence to perform. And of course angel investors make the decision themselves and don't have partners to share in the decision making process, which can be time consuming.

While it takes the angel investor an average of 67 days to
close, 45% said it takes them between 31 and 60 days
30% said between 61 and 90 days.
81% said they close in 90 days or less.
Just over 50% closed in less than 60 days.
In contrast, only 19% of the venture capitalists said they closed in less than 60 days.

Entrepreneurs underestimate the time it takes angels to close by 9 days; they believe angels ought to be able to get the job done in 58 days. A significant number of entrepreneurs, 24%, believe a deal should close in less than 30 days, whereas only 6% of the angels said they usually close in less than 30 days.
Only 1% of VCs said they usually closed in less than 30 days.

Have you, as an angel investor, ever used an on-line matching service to find a company to invest in?

Not one angel investor said they had ever used an on-line
entrepreneur-investor matching service. Additionally not one of the angel investors we interviewed said that they had ever used such a service. Entrepreneurs didn't think that these services were a valid way to find an investor either; only 2% thought that angel investors used them.

We also asked angel investors:
What rate of return do you expect for your investments made as an angel investor?

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As can be expected there was a wide range of expectations, the least being 20%, and the highest 100%. The average was 34%. Several angel investors said they wrote off the investment mentally as soon as it was made, given the high risk of this type of investing.

Methodology
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The angel investor survey information presented here is based on a survey completed by Brian Hill and Dee Power, founders of Profit Dynamics, Inc., in June 2001.
50 individual angel investors completed the survey and resided in various geographic areas of the country including Southern and Northern California, Pacific Northwest, Southwest, Midwest, the South and the East Coast.

The responses of the angel investors were compared, in some cases, to the responses of a series of surveys of 250 venture capitalists and of over 100 entrepreneurs actively trying to find capital.

The venture capital surveys were conducted each year from 1998 through 2001. The entrepreneur survey was conducted in April and May of 2001.

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