See what your startup investment returns at exit in dollars, as a multiple on your money, and as an annualized IRR. This free angel investment return calculator models how liquidation preferences and the preference stack affect your payout across exit scenarios. No signup, and we don’t capture any data from your entries.
Enter your investment, ownership, and an exit value to see your return.
How this is calculated
All preferred capital is treated as one preference stack that acts together. Non-participating (modeled at 1×): the stack takes the larger of its preference or its as-converted share; your payout is your pro-rata slice of the preference (your investment) or your as-converted share, whichever applies. Participating: the preference multiple × money back plus a pro-rata share of the remainder. Multiple = proceeds ÷ investment; IRR = multiple^(1/years) − 1. Simplifications: no seniority tiers, participation caps, dividends, or pro-rata rights; taxes ignored. Educational estimates, not investment advice.
How to use this calculator
- Enter your investment and your ownership at exit. Use the percentage you expect to hold after dilution from later rounds, not the percentage you bought. (A seed stake is commonly diluted 40 to 60% by the time a company exits. Model it with the SAFE dilution calculator.)
- Pick an exit value to test, and add the years from check to exit if you want an IRR.
- Open Advanced if you are not the only investor. Enter the total preferred capital and combined investor ownership so the model can tell whether the stack takes preferences or converts.
- Read the ladder. The table shows proceeds and multiple at half, double, and triple your test exit. A range like this is a more realistic way to think about startup outcomes than any single number.
The terms, in plain English
Multiple on invested capital (MoM)
Proceeds divided by what you put in: a $100K check returning $500K is a 5×. This is the number angels quote. It ignores time, which is why it is paired with IRR.
IRR (internal rate of return)
The annualized return that compounds to your multiple over the holding period: 5× over 7 years ≈ 26% per year, and the same 5× over 12 years ≈ 14%. Startup exits take longer than most new angels expect (7 to 10 years is normal), and IRR is where that time cost shows up.
Liquidation preference (your downside protection)
As a preferred investor, a 1× non-participating preference means that in a disappointing exit you get your money back before common shareholders are paid, provided the sale price covers the whole preference stack. In good exits you convert and the preference does not matter. It works like insurance and adds nothing to your upside.
Dilution between your check and the exit
Your ownership shrinks with every later round unless you exercise pro-rata rights. Entering your entry percentage here overstates your return, so always model to your expected ownership at exit.
How angel returns work in practice
Angel returns follow a power law: across a portfolio, most positions return little or nothing, and one or two winners produce most of the return. Studies of angel portfolios (the Wiltbank/Kauffman data is the most cited) put aggregate returns around 2.5× over roughly four years. That average is made of many zeros and a few 20× outcomes, not a row of 2.5× results. This has two practical consequences. Underwrite each deal as if it needs 10×-plus potential to earn its place, and build enough positions (most disciplined angels target 15 to 30) for the power law to work in your favor. This calculator prices a single position, and portfolio construction is the other half of the job. See how the odds change with portfolio size in our angel investment simulator, then read our Angel Investing guides.
Frequently asked questions
What is a good return for an angel investment?
On a single winning deal, 10×+ is the usual target. At the portfolio level, top-quartile angel and seed portfolios aim for 3 to 5× overall (roughly 12 to 18% IRR if the money is tied up for a full decade). If a deal cannot plausibly return 10×, its expected value in a power-law portfolio is usually negative.
Does a liquidation preference guarantee I get my money back?
No. If the company sells for less than the total preference stack, preferred investors share what there is pro-rata to their preferences. A $20M sale against a $30M stack returns about 67 cents on the dollar. A preference puts you ahead of common shareholders, but it cannot pay out more than the sale brings in.
How much will my stake be diluted before exit?
As rough planning math, each priced round dilutes existing holders 15 to 25%. Two to three rounds between your check and an exit commonly cut your percentage roughly in half. That is why pro-rata rights are worth negotiating for.
How accurate is this calculator?
It models a single 1× preference stack acting together, with no seniority tiers, participation caps, dividends, or taxes. It is scenario math for underwriting and setting expectations. It is not investment advice or a substitute for reading the actual documents.
If you are negotiating with a founder, send them the startup exit calculator, which runs the same math from their side. You can also browse all our free startup tools.