Many observers say that angels have high growth targets for the companies in which they invest. Some of them say that businesses need to project $50 million in sales in six years to be angel-appropriate, while others say that the target needs to be $100 million in that time period for the company to be right for angels. At the same time, a number of estimates indicate that more than 50,000 companies receive an angel investment in the United States every year. And many experts say that ten percent of angel backed companies meet the investors' sales growth expectations. Therefore, you might expect that around 5,000 angel backed companies hit angels' growth targets every year. However, it turns out that far fewer companies manage to do this than conventional wisdom suggests. To figure out how many companies hit these growth targets, I looked at the sales at age six of a cohort of companies started in a single year. Of the 511,000 new businesses in the cohort, U.S. Census data showed that 474 companies hit $50 million or more in sales by age six, while 175 companies hit $100 million in sales in that time period. This pattern raises an interesting question: Do angels invest in companies with lower expected sales than they let on or do fewer angel-backed companies meet the growth targets that angels have for them than conventional wisdom says? * * * * * About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America; Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By; Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures; Technology Strategy for Managers and Entrepreneurs; and From Ice Cream to the Internet: Using Franchising to Drive the Growth and Profits of Your Company. I discuss the topic of this post in more detail in my book Fool's Gold: The Truth Behind Angel Investing in America .