David S. Rose, the Gabriel of the New York Angels, last night unveiled ‘the secret economics of angels’ at an event at the very cool, brand new 92nd Y Tribeca Music Club and Cafe on Hudson Street.

Your typical angel will spread his celestial gifts across let’s say ten startups and want a return of 25 percent annually over six years:

1.25⁶ = 3.8x ROI

Of the ten startups on average five will fail. ‘Not you, the others,’ Rose reassured. Two will barely make their investment back and two may have some healthy return:

5 = 0x 1/10 x 5 x 0 = 0.0
2 = 1x 1/10 x 2 x 1 = 0.2
2 = 3x 1/10 x 2 x 3 = 0.6

Total return on investment comes to a pathetic 0.8. ‘That leaves a big whole in my portfolio,’ Rose said. ‘So your deal must return 30 times money back.’

If your business idea has no chance in hell ever to return 30 times, angels won’t be interested.

It’s one reason why less than 1 percent of startups will get outside money. ‘In theory 2 of you are gonna get funding,’ Rose told his audience.

We did get free drinks and goodie bags though. Thanks New York Angels!