how to start angel investing for as little as $1k (+ free template)

I’ve been angel investing for 2 years with intentional focus on getting practice and creating more process in h2 2021.

I started angel investing to support founders from and/or supporting underrepresented communities. Since starting, I’ve reviewed >200 deals and written over 30 checks. That said, I’m no expert, and this is not investment advice! Sharing some takeaways below but I’d recommend reading Elizabeth Yin’s Learnings from a 6x angel investment portfolio for a more nuanced, experienced perspective.

Done well, angel investing can be a great way to learn, support founders and causes you care about, and grow generational wealth. While 👼🏽 investing can be risky (70% of startups fail), it can also provide outsized returns. For example, if you invested $1,000 into Airbnb’s seed round, your money would now be worth $10.2m, a 10,200x markup.

While such sizeable outcomes are unlikely, they do happen. According to AngelList, 2.5% of the 2,600 seed stage startups they tracked from 2013-2021 became unicorns. And with the rise of special purpose vehicles (SPVs) like syndicates and RUVs to manage the investment process with streamlined tech, you can reduce risk by participating in deals for as little as $1,000.

To start angel investing:

  1. find or create a community

  2. do your research

  3. start writing checks

1. Find or create a community to create angel investing deal flow and meet people to discuss deals with

A lot of the angel investors I know wrote their first angel check when a friend or coworker started a company and invited them to invest in their friends and family fundraising round. Others got their start by investing through syndicates, a special purpose vehicle (SPV) designed to give accredited investors* the opportunity to invest as little as $1k/deal under a Lead Investor. For people already in the startup ecosystem, it can be easy to fall into either opportunity. But if you’re not, how do you get involved?

I don’t live in the Bay Area and most of my friends work outside of the startup ecosystem, so I’ve had to tap into other networks to build deal flow and find trustworthy thought partners to talk through deals with.

A great place to get started is in an angel investing community. I joined Sacra’s private market research Discord community early on because the founders were former Animalz employees, and found out about Angel Squad through flow.club after joining a session with Hustle Fund GP Elizabeth Yin. Both communities offer a space to ask questions, share deals and access exclusive events and deal flow. While I’m biased, there are several worth exploring:

Angel Investing Communities

Many communities provide vetted deal flow, ideal for a passive and/or time strapped investor. Sourcing deals could be a FT job, let alone deciding whether or not to invest, winning and supporting founders. Although other people’s due diligence is a helpful short cut, make sure to review every deal and form your own opinion before committing to a round.

Additionally, you get to write smaller checks than you could if investing direct, and you have a group of people looking at the deal at the same time as you who are down to connect to discuss it from first principles.

Beyond communities, following and connecting with individual investors and founders has helped me get familiar with the ecosystem faster. Twitter has been an incredible place to meet new people, and many people (especially those early in their journey) are willing to connect even without a warm intro.

People to connect with in/around VC

Keep in mind that for cold outreach to work, you need to have a specific ask (eg You offered unique insight on [subtopic] the article you wrote about [industry], do you have 15m for me to ask a few followup questions?) And if individual outreach feels like too much, all good.

2. Do your research

Research comes in two flavors:

  • learning more about angel investing

  • learning more about each individual deal

Research to learn more about angel investing

One of my earliest VC connections was to Mac at RareBreed. Mac has an incredible story and was beyond generous with his time and resources. He recommended that I read Angel by Jason Calacanis (📕⭐️⭐️⭐️⭐️), a prolific angel investor who has done over 300 deals and had over 40 exits.

Reading Angel showed me how much I still needed to learn about investing to be more than dumb money on the cap table. Here are some of the resources that helped me go a step further:

Angel Investing resources

Books

While it’s helpful to get a variety of viewpoints, finding a fund or VC who has a mission, sector focus and/or thesis aligned with yours is a great way to accelerate your learning, especially if they are active writers. I met Elizabeth Yin through flow.club and started reading everything I could find that she’s written about angel investing. She recently released her best startup and investing advice as a free book which I highly recommend.

Research to learn more about each deal

Hustle Fund invests in just 1% of the deals it sees. Some deals are automatically disqualified based on valuation, sector and location. It can be helpful to have a similar filter as an angel so that you aren’t trying to diligence everything you see.

For direct investing, I review most decks quickly and disqualify deals based on:

  • high valuation

  • minimum check size

  • sector: I’ll sometimes invest if I have no familiarity but in general stick with sectors where I either already have expertise (eg consumer, b2b SaaS, future of work) or am interested in building expertise (blockchain, web3, healthtech).

  • idea: would I be an enthusiastic user or do I understand the user well enough to be able to have conviction that the company can get traction?

Note: this is my process for inbound only

I keep track of my investments in an Airtable base where I rate each deal and keep notes.

View and copy the angel investing database template here

Someone pitched me on a compact dishwasher a couple of weeks ago. I passed not because it was a bad deal, but because it missed the mark on all filters for me. It could be an incredible deal for the right investor but I wouldn’t be a good partner for that company.

When investing through a syndicate instead of directly, you get to lean on the syndicate lead’s assessment shared in a deal memo. There can be less pressure to be smart money/value add, which can make syndicates a great way to learn about new sectors. That said, it’s still important to do your own research and think for yourself to form an opinion.

3. Start writing checks!

In Angel, Calacanis recommends getting started by making lots of small bets, with the knowledge that not everything will hit. To go deeper on decision making frameworks to apply to investing I read Thinking in Bets by Annie Duke (📕⭐️⭐️⭐️⭐️), a psychologist turned poker player.

My earliest investments were fairly random and opportunistic, sourced entirely through my network and focused on just a few sectors. Investing individually was fun but somewhat lonely, especially starting out, and I didn’t use a rigorous assessment framework to decide what to 👍🏽 / 👎🏽.

Since joining Angel Squad, I’ve adopted an index fund strategy, writing a small check into every deal across a wide variety of sectors (10 in 2021!) I’ve also joined a few other syndicates after researching syndicate leads.

When you’re getting started, it’s easier to pick 1 winner out of 10 than 1 winner out of 2. Syndicate investing has helped me diversify risk and make more small bets.

There are some tradeoffs vs direct investing, but overall, it can be a great way to learn.

I’ve found syndicates through other syndicate leads, by listening to podcasts and through research. Not all leads play long games. Proceed with caution.

Overall, it’s a great time to get started as an angel investor.


I’ve been pleasantly surprised by the warm welcome from the venture community and am excited by the opportunity to welcome more underrepresented investors - women, LGBTQ+ and people of color - into this world.

If you’re interested in getting started and want to talk further, my Twitter DMs are open! We are also accepting applications to Angel Squad on a rolling basis. All are welcome!

Join Angel Squad

My 👼🏽 investments to date: