Episode 118: From Zero to Angel: How to Get Started in Angel Investing and Spot the Next Unicorn

In this episode of Product Thinking, Melissa Perri talks with Brian Nichols, Angel Squad Co-Founder of Hustle Fund. They dive into the world of angel investing, discussing the most effective strategies to invest and what to look for in assessing an early-stage startup. Brian has an impressive track record of entrepreneurship and corporate leadership. Upon earning his master's degree from USC, he launched two successful ventures, Date Simply and RewardTag.com. He then joined Lyft in 2014, where he spearheaded the growth of the California Markets, which accounted for a staggering fifty percent of all Lyft rides at the time. During his tenure at Lyft, he played a key role in scaling the company's local teams nationwide, contributing to the expansion of Lyft's employee count from 250 to 2,500. Brian continued his professional journey by founding the Lyft Alumni Angel Syndicate, a network that comprises numerous early Lyft employees. Before joining Hustle Fund, Brian held positions at esteemed companies such as On Deck, BlackBird, and Zoox, where he undoubtedly contributed his expertise and skills to further their success.

Brian has an impressive track record of entrepreneurship and corporate leadership. Upon earning his master's degree from USC, he launched two successful ventures, Date Simply and RewardTag.com. He then joined Lyft in 2014, where he spearheaded the growth of the California Markets, which accounted for a staggering fifty percent of all Lyft rides at the time.

During his tenure at Lyft, he played a key role in scaling the company's local teams nationwide, contributing to the expansion of Lyft's employee count from 250 to 2,500. Brian continued his professional journey by founding the Lyft Alumni Angel Syndicate, a network that comprises numerous early Lyft employees. Before joining Hustle Fund, Brian held positions at esteemed companies such as On Deck, BlackBird, and Zoox, where he undoubtedly contributed his expertise and skills to further their success.

You’ll hear Melissa and Brian talk about:

After more than a decade of working at startups, Brian discovered his passion for helping aspiring founders who are paving the way for the next big thing. He finds it fulfilling to support those taking a considerable risk with their lives and careers, making sacrifices along the way. Brian is dedicated to finding ways to accelerate their journey toward becoming successful founders.
Angel investors typically invest between $1,000 to $3,000 in startups rather than writing larger checks of $25,000 or more. This investment activity is accessible to most individuals, as they can put small amounts of money into early-stage startup companies. Although this approach carries a high risk, there is also the potential for significant returns.
Diversification is key in investing in early-stage startups. By investing in a range of companies and spreading out the risk, the likelihood of finding a successful venture increases. Being part of a network that provides access to high-quality companies further enhances the chances of success. Therefore, investing in early-stage startups requires careful consideration and research but can potentially lead to significant financial rewards.
Assessing an early-stage startup requires considering various factors. Firstly, it's important to evaluate the market's state, including its size, potential for growth, and any relevant regulatory changes. Next, it's crucial to assess the experience and capabilities of the team behind the startup, as they will be instrumental in driving its success.
In addition to these fundamental factors, there are other critical aspects to consider. For instance, it's crucial to determine whether the business is high-margin, as this can significantly impact its profitability and long-term viability.
When investing, don't rely too heavily on signals that aren't the right ones to consider. For instance, the fact that other investors are putting money into a company isn't necessarily a good signal for you to base your investment decision on. As a new angel investor, you might hear that a fund is investing in a particular round and assume that this is a positive signal. However, without knowing how much the fund is investing and the reasons behind their decision, you could end up following the wrong signal.
Instead, focus on the business itself. How is the company performing? Is it a legitimate business with a customer base? How many customers does it have, and how fast is it growing? What is the current valuation of the company? These are the key factors to consider when making an investment decision. It's also important to diversify your investments against high-risk assets, particularly if you're investing in earlier-stage companies.

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Resources:

Brian Nichols on LinkedIn | Twitter

Hustle Fund

To access the free course on Angel Investing for Product Leaders, go here: Hustlefund.vc/melissa

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Previous guests include: Shruti Patel of US Bank, Steve Wilson of Contrast Security, Bethany Lyons of KAWA Analytics, Tanya Johnson Chief Product Officer at Auror, Tom Eisenmann of Harvard Business School, Stephanie Leue of Doodle, Jason Fried of 37signals, Hubert Palan of Productboard, Blake Samic of Stripe and Uber, Quincy Hunte of Amazon Web Services

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