But I feel like it isn't 1/500. Maybe on the order of like 1/5000... Think about how many companies apply to just one program like YC at any given SEASON. And this is just one program. When you factor in the other ones like TS, AP, 500 Startups how many years did it take for the first Heroku to come out. And then these guys are considered the "best" at picking and cultivating startups. Think about all the crap other angels have to probably go through.
They might be ahead but I don't think it's that easy.
Sure, for angels who aren't very prolific, it's a lot more variable. I should have mentioned that I was thinking about it from an incubator's perspective.
Normal angels aren't investing in a uniform random manner, though, and I have to assume that that helps their odds. Lending their money and their name to the company can help the odds as well.
Heroku was founded in 2008, years before 500 Startups and many of the other incubators, so it didn't take that long. (YC was founded in 2005)
The bigger issue is access to dealflow -- if you're a no-name angel, with no particular accomplishments, connections, etc. you're not even going to get entrepreneurs to talk to you. Even if you mail a top company a $50k check and investment offering, it will probably get rejected.
If I had $1mm to invest and got to put it into exactly the companies I wanted every year, I could probably get great returns, but for a random dentist from Oklahoma, he'd be better off just buying AAPL stock.
They might be ahead but I don't think it's that easy.