Why Founders Make Great Angel Investors - TFP - 10/2

Author

Brian Nichols
October 01, 2025 • Read time: 9 minutes

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Hey friends - we're switching things up in today's edition! Brian Nichols, the lead writer of Hustle Fund’s angel investing newsletter, Small Bets, will be taking over.

Take it away Brian!

📰 Today's Edition: Why More Founders Should Angel Invest Micro-Checks

Hi TFP readers! 

I’m Brian Nichols, co-founder of Hustle Fund’s angel investing community, Angel Squad.

I also write Hustle Fund’s newsletter on startup investing every week to 23,000+ readers of Small Bets (👉click here to subscribe).

This is me.

I’ve been angel investing for 7 years, and have helped nearly 200 startups raise $80M+ in funding from 1000s of investors through my syndicates.

Here's a little fun fact I learned while working with all those founders and investors: the most helpful angels aren't who you'd expect them to be.

They aren't the retired tech executives or the trust fund kids who can write big checks. They're the founders who are still in the trenches, building their own companies. 

That’s right! I’m talking about you 🫵

The Founder-Angel Phenomenon

I used to scratch my head at this weird pattern I kept seeing.

Founders who hadn't had exits yet, grinding through their own startup journeys, were writing angel checks into other startups.

And these weren't $50K checks. We're talking $1,000 to $5,000 investments.

At first I thought, "Why are they doing this when they probably need every dollar for their own company?"

But as Kobe Bryant once said - they were playing chess while the rest of us were playing checkers.

The Network Hack

These founder-angels had figured out that writing small angel checks is the ultimate network hack. Think about it - when you're a founder trying to fundraise, who do you need to meet?

Other investors, obviously.

But how do you get into those exclusive investor circles when you're not wealthy (yet)?

Well my founder friend, you become an investor yourself.

Suddenly, you're in the same WhatsApp groups as seasoned angels. You're getting invited to pitch events and investor dinners. You're meeting potential co-investors for your own future rounds.

All because you wrote a $2,000 check which gives you the right to call yourself an "angel investor."

The Unfair Advantage

The reason why founder-angels are great investors is because they understand what you're going through.

That VC who keeps talking about "value-add" isn’t staying up until 3 AM debugging code or spending their last $500 on Facebook ads.

But that founder-angel you’re talking to is. So when they review your pitch deck, they're not just looking at metrics.

They're remembering their own sleepless nights and thinking, "How can I actually help this person avoid the mistakes I made?"

And while other angels give theoretical advice, founder-angels are sharing battle scars and real solutions.

Real Value-Add

One of Elizabeth Yin’s (GP of Hustle Fund) portfolio companies mapped out the impact of a single $5,000 angel check from a founder.

That one check led to:

  • Three customer introductions

  • Two key hire referrals

  • Five additional investor introductions

  • Hundreds of thousands in follow-on funding

So why was this founder-angel so effective?

Well, they were still actively building their network for their own company.

Every connection they made, every event they attended, every relationship they built - it all became value they could share with their portfolio.

The Compound Effect

When founders become angels, they create this amazing effect:

  1. They meet other founder-angels who become customers, partners, or co-investors

  2. They learn about new markets and business models firsthand

  3. They build relationships that help both their portfolio companies AND their own startup

  4. They develop pattern recognition that makes them better operators

It's like getting an MBA in entrepreneurship, except you're getting paid to learn.

The Founder's Playbook for Angel Investing

If you don’t know where to start, here's my 5-step playbook:

Step 1: Join startup communities where deal flow is shared (Angel Squad is one option, but there are others).

Step 2: Start with companies where you can actually help (i.e. adjacent markets or with complementary products).

Step 3: Write small checks ($1K-$5K) to those companies that you genuinely believe in.

Step 4: Actually help: make intros, share feedback, and be the angel you wish you had.

Step 5: Watch your network compound.

The Time Is Now

Don't wait until you've "made it" to start angel investing.

The founders who are changing the game are starting now, while they're still building their first companies. They're turning their startup journey into a network-building, pattern-recognition, relationship-compounding mega machine.

That $1,000 check is your entry ticket to a community that will make you a better founder, a better investor, and probably lead to opportunities you can't even see yet.

If this piqued your interest, subscribe to our startup investing newsletter, Small Bets (subscribe here).

– Brian from Angel Squad

🎥 Watch This

Most founder pitch decks make the same mistake: terrible slide titles. A skimmable deck needs clear, compelling titles and they can make all the difference.

We explain more in this episode of Uncapped Notes.