Most start-ups are terrible investments
Milton’s First Law of Angel Investing: Most Start-ups Are Terrible Investments.
Start-ups start small, weak, and of no real value, and they either die fast or they stumble along small, weak and of dubious value for years, and this has very little to do with how smart, well-intentioned, or hard-working the founder is. Only a minute fraction of start-ups ever return any value to shareholders as investors. Making a good start-up investment really is as rare as winning the lottery (and probably, about as predictable).
This brutal truth is very important to angel investors who want to increase their odds of success.
It is also a very useful reminder for entrepreneurs and founders to be realistic about their chances.
Lastly, it is a dose of reality for people in the innovation/incubation/start-up ecosystem who might be tempted to glamorize start-ups and over-estimate their prospects for success.