Hmmm not sure this is true in the big picture... but discuss amongst yourselves!

I see his point: Angels get access to information that lets them double down on winners early.

Given the above elements, the downside for angel investors is that many early bets will fail. The upside is they’ll get privileged access to information and they’ll be able to know (instead of guessing) who is really outperforming the other companies they have information on. Why is this important? Because the real action is what happens next.

Put yourself in the shoes of an investor for a moment, with, say, 20 investments. If you invested at a $5 million average valuation and 15 of the companies eventually fail, four of them could exit for an average of $20 million and one could make a $250 million exit. It’s a 64-time return on a 20-time investment -- not bad at all. But here is where things get interesting, because if you double down at the following round of the best performing company, that’s an additional 10-time return on a single -- and much less risky -- investment.

and tax breaks, yes?

And tax breaks, yes!

I agree assuming the Angels are spreading themselves around. Angel investors are not blind to the fact that at that early stage it's a huge hit or miss situation. Setting themselves up to catch the big wins is a sweet position to be in.

Any angel that's not spreading around bets is taking a big risk because you're right that most startups fail. But doubling down on the ones succeeding is a good way to increase returns.