It's tempting to believe there are many extremely wealthy ex-entrepreneurs out there eager to swoop in and invest tens of thousands of dollars in your start-up -- even though you've never met. But a new book, "Fool's Gold? The Truth Behind Angel Investing in America" by Case Western Reserve University entrepreneurship professor Scott Shane, argues that such "angel" investors are far rarer than most entrepreneurs imagine.

Prof. Shane analyzed Federal Reserve data and other research on business investments and discovered many...