I’m super psyched! Our global angel club called Angel Squad, led by Brian Nichols, has reached 2000+ members this past summer across 40 countries! To me, this isn’t just a vanity metric. Angel investors play a crucial role in nurturing startup ecosystems — much more than VCs, so growing and nurturing angel investor communities worldwide is really important to me.
Silicon Valley’s Secret Sauce
Silicon Valley’s long-standing success as a startup hub is often attributed to its weather, schools, and legacy of tech companies. However, I disagree. There are plenty of places in the world with permutations similar to this that don’t have anywhere near the startup density that the San Francisco Bay Area has.
I think, a less obvious, yet critical factor for Silicon Valley’s success is its vibrant Angel investor community. Unlike the common perception that Silicon Valley’s Angels are wealthy individuals writing $25,000 checks at a time, many people invest much smaller amounts here.
For instance, early Uber investors included people who invested as little as $5,000, which became worth $25 million by the time of the IPO! What this illustrates is that angel investors don’t have to invest a lot of money in one go, and finding winners can be life-changing for small angel investors.
This culture of numerous small-scale investments enables a large pool of resources and support for many startups in the Bay Area. Early-stage companies benefit not only from financial backing but also from the introductions and advice that these investors also provide. Such a supportive environment allows startups to thrive and grow.
The Ripple Effect of Angel Investments
A robust Angel investor community can significantly impact a startup’s trajectory. With small checks, startups can secure essential early funding that institutional investors often hesitate to provide. This early support is crucial for the initial phases of a startup, where risk is high, and traditional funding is scarce. In addition, small check investors can often lead to larger checks later by opening doors. One of our portfolio founders at Hustle Fund named Steven Fitzsimmons (Fitz) broke down the anatomy of his seed round a few years ago. His smallest investor (who invested $5k) was the most helpful of all. Small checks lead to both introductions and more checks.
In contrast, many other cities outside of Silicon Valley, despite having either good tech ecosystems or wealthy individuals, lack such a vibrant Angel network. Wealthy individuals in these areas often do not reinvest their money and time back into their local startup ecosystems, which stunts the growth of potential startups in the area. Places like Boston, for example, despite its tech prowess, academic strength, and successful individuals, has lacked for decades a strong Angel community of hundreds of active individuals until more recently with the emergence of active angels from newer successful companies like HubSpot and more. (And I’m sure many of my Boston friends will disagree and say they’ve been actively investing for a long time now, but they are the exception not the rule to the geography :))
Growing Angel Communities Globally
The rise of Angel investor communities in cities like New York and Boulder also illustrate the transformative power of these networks. By fostering a culture where successful individuals reinvest in new startups, these cities have developed robust startup ecosystems. Neither of these cities were previously known for being tech hubs. This model shows that there is no special formula exclusive to Silicon Valley; any city can replicate this success by building a strong, active Angel community.
Angel Squad’s Vision
Hustle Fund’s Angel Squad aims to replicate and expand this model globally. With 2,000 members already on board, the goal is to grow to 10,000 and eventually 100,000 Angel investors. We want to empower entrepreneurs everywhere — not just in the US.
Let’s go!
The journey of Angel Squad is just beginning, but I’m so proud of Brian and team for the progress they’ve made. If we can continue to help great startups globally get access to more capital — to truly have free markets — that would be the dream. Let’s go!
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