Introducing Angel Squad: enabling the next 10k angel investors

Most people know that Hustle Fund is a VC firm. But, it’s really a lot bigger than that. Hustle Fund is about democratizing wealth through startup creation. 

In 2017, when we launched our VC fund, we designed an inclusive model to support founders of all types. We believe that great founders come from anywhere and can look like anyone. 

Today, we are announcing a Hustle Fund initiative called Angel Squad led by Brian Nichols (prev led On Deck Angels and the Lyft angel syndicate) to build an inclusive model to support angel investors of all types. Just like we believe great founders come from anywhere and can look like anyone, we believe the same applies to angel investors.

Traditionally, angel investing has been an opaque asset class that has required investors to have a lot of personal money and have special connections. But, with Angel Squad — neither is required.

Angel Squad is a modern day angel group: it’s angel investing education & networking and socialization & dealflow all wrapped together. We think angel investing is naturally social but also needs to have strong infrastructure to make people successful with BOTH knowledge AND  dealflow. 

Over the years, so many friends have asked me how they, too, can get into angel investing profitably? And is it possible to do so without a lot of money? 

And the answer is yes and yes. But it’s really hard to figure out on your own. It took me several years to really learn the ropes, and after looking at more than 30k companies and funding 450+ startups, here are some interesting things that have surprised me along the way.

1. Most angels in Silicon Valley are not investing with very much money. 

Previously, when I thought about angel investing, I thought you needed to be super rich – plunking down $25k checks at a minimum into each company. The truth is there are so many Silicon Valley angels — micro-angels as I like to call them — who are investing $1k here and there. 

If you do a handful of these investments a year, angel investing actually becomes very accessible to many more people. If you can afford to invest $5k+ across a handful of startups each year, you can start to build a nice portfolio over the next few years.

In addition, a lot of people cite the net assets or salary required to become an accredited investor as a blocking point for getting into angel investing. But one recent change in the law is that those who can pass the exam for the Series 65 license are also classified as accredited investors, which opens up angel investing to all who are motivated. In fact, to make Angel Squad very accessible, we are also deducting the cost of the Series 65 test for those who are accepted into Angel Squad. 

With Angel Squad, our minimum check size per deal is just $1k to enable investors to have enough capital to continue investing in many companies as they grow their portfolios and learn. 

2. High risk, high reward investments are how so many people in Silicon Valley make a LOT of money

When you think about financial strategy, the first rung of the ladder is just being able to survive – save enough money to cover, food, housing, and clothes. The second rung of the ladder is to start saving for a rainy day and potentially even start to invest in low-risk assets that will appreciate slowly over time. The third rung of the ladder – once you can afford to take serious risk – is to invest some money into high risk-high returning assets — such as startups. 

A couple years ago, I read that a number of people invested $5000 into Uber’s seed round. If they held their shares until the IPO, they would have made ~$25m from that 1 investment. Wow.

What a lot of people miss about startup investing is that the returns are not linear — the returns are outliers. So if you can take a lot of small at-bats that will completely miss but hit one out of the park, you will more than cover your losses and potentially much much more.

3. To get into angel investing successfully, it helps to have a guide and lots of practice

I consider angel investing to be akin to a sport. You have to do a lot of it in order to practice. And you have to practice methodically — what did you miss in an investment that didn’t go well? What questions would you ask differently to a startup founder? What risks are ok for you to take and ok to dismiss? The best startup investors are constantly re-evaluating their approach and thesis — I certainly have evolved my own thinking over the past years. 

It’s helpful to practice alongside someone else who has been investing for years to learn from their learnings. In addition, if you can tag along with someone who has great deal flow, that will increase your chances of winning even as you are evolving your own thesis. Just being in the flow and picking a lot of companies is enough to win even if your thesis isn’t great yet. 

With the rise in microfunds and angel-operators, there are a LOT of startup investors with great deal flow who are incredibly collaborative. With Angel Squad we enable new angels to invest alongside our own fund (Hustle Fund), and soon we’ll make it easy for Squad members to invest alongside other great investors as well. 

We have run two Angel Squad cohorts so far this year and here are some quick stats:

• 163 members to date
  • 46% female
  • 67% of members live outside of Silicon Valley
  • Most of our members are new to angel investing
  • 100% are kind — we have a NO ASSHOLE rule at Angel Squad

And Brian and team are just getting started…If we can help thousands or tens of thousands of new angels get underway, I think the impact will be huge. 

The tech industry often talks about how to increase funding for overlooked founders (geography, race, gender, age, industry, etc). One way to solve this is to have a LOT more investors. Our hope for Angel Squad is that we can bring in a plethora of new investors who have diverse voices, backgrounds, and geographies into Angel Squad to get more startups funded.

I am so excited about the product that Brian Nichols has built in just the first few months, and there is so much more he has in store. 

With Angel Squad, we are all excited to make angel investing more accessible, inclusive, and fun – we welcome all with an interest to apply. 

Learn more here and apply here.