Why the hours you spend on diligence matter

The hours matter because they are the only thing about angel diligence that anyone has measured against what angels got back. One study did it, in 2007, and its numbers are still the ones every angel training deck quotes. This page gives them exactly, with the limits the authors put on them, so that you can decide how much weight to put on the hour this guide asks you to spend on the software.

What did Wiltbank and Boeker measure?

Robert Wiltbank of Willamette University and Warren Boeker of the University of Washington published "Returns to Angel Investors in Groups" in November 2007, with financial support from the Ewing Marion Kauffman Foundation and the Angel Capital Education Foundation. They surveyed members of 86 angel groups. Thirteen percent responded, giving 539 individual angels, who between them reported 1,137 exits: acquisitions, public offerings, or closures.

The headline result was an overall multiple of 2.6X in an average holding period of 3.5 years. That average hides the shape of the distribution. Fifty-two percent of the exits returned less than the money invested. Seven percent returned more than 10X, and those seven percent produced 75 percent of all the money returned. Sixty-one percent of the angels had a portfolio multiple above 1X, which the authors present as the case for holding several investments rather than one.

The sample was early-stage by any definition. Thirty-four percent of the deals were at the seed stage and 41 percent at the start-up stage. Forty-five percent of the ventures had no revenue when the angel invested, and the median revenue across all of them was $125,000. Software was the largest industry at 19 percent of exits.

What did the study find about diligence hours?

Each respondent was asked how many hours of diligence they had performed for each investment. The median was 20 hours. The mean was 60, because a minority of angels reported far more.

Splitting the sample at the median, the authors report an overall multiple of 5.9X for the above-median group against 1.1X for the below-median group. Sixty-five percent of the below-median exits returned less than 1X, against 45 percent of the above-median exits. Comparing quartiles rather than halves, the top quartile, angels who spent more than 40 hours, saw an overall multiple of 7.1X. The chart in the report notes that 26 percent of exits involved more than 40 hours of diligence.

Holding periods differed too: 4.1 years for the high-diligence group and 3.4 years for the low-diligence group. That is worth keeping in mind, because a longer hold with a higher multiple is a different investment from a shorter hold with a lower one, and the report gives multiples rather than annualised returns for this comparison.

Reveneau's angel review is built on the modest reading of these figures: the median angel spends 20 hours, the study associates more hours with better outcomes, and one hour on the software is the cheapest hour to add to a process that currently has none.

What can the study not tell you?

Three limits are stated in the report, and a fourth follows from its design.

The hours are not split by type. The question asked for total hours of diligence. There is no breakdown into time spent on references, on the market, on the financials, or on the technology. The study therefore cannot support a claim that technical diligence in particular improves returns. What it supports is that diligence in total is associated with better returns.

The hours are self-reported, after the fact. Angels were asked in 2007 to recall how many hours they spent before investments that had already exited, some of them years earlier. Angels who remember a deal going well may also remember working harder on it. The authors flag this by saying that "length of time may not be the only important factor in due diligence" and that future research should assess the quality of diligence rather than only the quantity.

The data is from 2007. Sixty-two percent of the exits occurred after 2004, and only 8 percent before 2000, so the sample is mostly the years just before the study. The market for early-stage software has changed since: the ACA's John Harbison reported in August 2025 that median pre-seed pre-money valuations doubled to $10 million in 2024. Whether the 2007 relationship holds at those prices is unknown.

The sample is group angels only. The report says so directly: the findings refer to angels connected to angel organisations, and the differences between group and non-group angels were "simply unknown empirically" at the time.

One more thing is easy to miss. Months before the study came out, the ACA's own July 2007 due diligence guide quoted David Rose of New York Angels saying that "nobody has been able to show a correlation between the length of time spent on due diligence and probability of success". The Wiltbank study is the answer to that sentence, and it is a correlation. It does not show that spending more hours causes better returns; it shows that angels who spent more hours got better returns. Angels who do more diligence may also pick better deals for other reasons.

What did the study find beyond hours?

Two other factors are in the same report, and both bear on how a group should assign the technical check.

Industry expertise. Half of the investments were unrelated to the investor's industry experience. Where they were related, the angel typically had fourteen years in the industry, and the report says investment multiples were twice as high for investments connected to the investor's expertise. For a software deal, that is an argument for having the member who has built software do the technical hour, which is the subject of assigning the technical reviewer in an angel group.

Participation after investing. Angels who interacted with the company a couple of times a month saw 3.7X in four years; those who interacted a couple of times a year saw 1.3X in 3.6 years. The authors say this does not mean more than a couple of times a month would be better.

The study also found that follow-on investment by the same angel was associated with lower returns: 1.4X for ventures that received one, against 3.6X for those that did not, with 68 percent of the exits that took follow-on money resulting in a loss of capital. That is a different subject, and it is a reminder that the diligence hour is cheapest before the first cheque.

How should an angel use these numbers?

Treat them as permission rather than as a formula. They do not say that 21 hours beats 19. They say that the angels in one large sample who did more checking than the median got back several times more than those who did less, and that the median was 20 hours.

Twenty hours is half a working week, spread across references, market calls, reading the financials, meetings with the founder, and the group's own discussion. Hustle Fund's angel diligence checklist says most angel diligence runs 1 to 3 weeks, which is consistent. The question this guide asks is how many of those hours currently go to the software, and for most angels using the standard checklists the answer is none, for the reasons in what angel diligence misses on technology.

The proposal is one hour. The one-hour technical check is the script. If the deal is large enough that one hour is not proportionate, when to pay for a professional technical review is the next page.

Is there newer data?

Not on hours against returns. The ACA's Angel Funders Report, published each year, tracks dollars, deal counts, sectors and valuations across its member groups, and its 2026 edition reported member investment of $491.3 million in 2025. Its February 2025 analysis of Dealum platform data from more than 12,000 applications to US angel groups found that 3 percent of pre-seed applications received funding, rising to 4.5 percent at seed, 8.3 percent at Series A, 12.6 percent at Series B and 16.4 percent at Series C and later. Those are selection rates, and useful ones, and they say nothing about diligence time.

Until someone repeats the 2007 study, its figures are the evidence, with the limits above attached. The pillar page uses them the same way.