Angel Investors: Exit Strategy = We plan to IPO

I think it certainly is. If only 1 in 10 startups succeed and further, only 1 in 10 of those that are successful, are the wildly successful startups you know, your answer is that your exit strategy, the point at which they'll make return on their investment, has a likelihood of about 1%.

Not only is such a strategy rather unlikely, but it doesn't reflect as well as it should on your understanding of your market. MUCH more likely is an acquisition (I'm not suggesting that should be your exit strategy answer either, I'm just painting a picture for you as to how to think about it). Your industry has existing corporate and enterprise players who you may consider competitors or potential partners. Those companies usually have the 2 things that make an acquisition of your company work: Deep pockets & an inability to innovate (as tends to happen as companies mature).

So it is more likely that you will be wildly successful on your own and develop the industry credibility and reputation that enables you to IPO? The answer MAY be yes but it will still take 10+ years. OR is there LESS risk for the investors in your recognizing that in a much shorter time frame, your product will be developed and the market recognized such that a big name in the space will pick it up for a 10x return?

Good and bad. Good that you are willing to create a company that is amicable to an exit, bad that you are defining IPO as the approach. Following Pauls answer, many investor backed companies today don't get as far as an IPO - more likely they are M&A candidates.

I'm assuming that you are an early stage startup (apologies if I am wrong). Using Steven Blanks definition, "a startup is an organization formed to search for a repeatable and scalable business model." Once you find that model, then you scale & work on M&A / IPO efforts. Find the model first, then figure out how to cash out. ;)