The stereotype of the "angel investor" is a retired wealthy entrepreneur who sees potential, asks tough questions, takes a large stake, and in a few years makes a massive return in an IPO. This outsider fills the gap between the venture capitalist and the professional investor, swooping in with cash and expertise to bring dreams to fruition.

Unfortunately, Shane observes, this figure bears no relationship to reality. In Fool's Gold, he draws on hard data from the Federal Reserve and other sources to paint the first reliable group portrait of the lionized angel investors....