In a recent edition of Small Bets, I shared my 2024 word-of-the-year. I also asked you all to share YOUR words of the year. And tons of people responded. Here are a few of the ones that y’all shared with me.

• Resourcefulness
• Legacy
• Kindness
• Connection
• Simplify
• Intention

In case you missed it, mine is “listen." And with that in mind, a few weeks ago I had the chance to listen to an incredible investor and human named Haley Bryant.

Haley is an investor at Hustle Fund (among like a zillion other things). She’s been investing for 5 years, including a few years as an angel investor.

In January 2024, Haley posted a recap of her investor journey on Twitter.

I found this post to be incredibly inspiring – major progress in a short amount of time – and also left me with a lot of questions.

How did she find her deals that first year? How many deals was she seeing vs. investing in when she first started, and how did that ratio change over time? How did she develop dealflow in specific areas? And how did she figure out the best way to provide help?

Luckily, Haley was open to answering these questions… and a bunch of other ones.

My original intention was to publish an article about the first 5 years of Haley’s investor journey. But instead I’m going to focus today on just the learnings from Haley’s first year as an angel.

We all need to hear these lessons … whether you’re thinking of becoming an angel investor, you’re just starting out, or even if you’ve been in the game for a while.

How she got started completely on her own

Haley’s angel investing career launched sort of accidentally. Haley wasn’t yet part of Hustle Fund. She was an operator at a content marketing company, working alongside some pretty amazing humans.

One day, one of Haley’s teammates told her that he was thinking of starting a business, and told her a bit about the concept. Haley had never made an investment before – she had never even seen a term sheet – but she knew this teammate well.

She knew he was an incredible operator. She knew he had a strong work ethic. And knew he was an expert in the space. With basically no other information, Haley offered to invest immediately … and told him to quit his job to focus on the business.

Since this was her first investment, Haley had no idea what “good” looked like when it came to evaluating the startup. She had never seen a term sheet. She didn’t even know how to actually transfer the funds. She just knew she believed in the founder and wanted to support him.

Haley got incredibly lucky with this investment. Not only was the co-founder a repeat founder who was disciplined and conservative with his business strategy, but the company itself was the perfect first-investment to make.

Haley’s first investment was into a company called Sacra: a private market research company. The work Sacra was doing helped Haley get smarter about the world of business very quickly.

The other cool piece of this company? The community. Investing in Sacra gave Haley access to founders, investors, and operators who played a big role in her angel investing journey.

So, yeah. Haley’s first investment was incredibly lucky.

The rest of her year? A bit of a mixed bag.

Year one learnings

When Haley first got started investing in 2020, she didn’t have a “method” of evaluating companies, per se.

She would hop on the phone with a founder, and if A) she liked the mission of the company and B) the founder seemed thoughtful and followed up, she was likely to invest.

And this is how Haley invested in 15 companies in 1 year.

Here are some of her key learnings from this first year of investing:

1.  B2C is really hard.

One of the companies Haley invested in was an upskilling platform. Their goal was to help people with dead-end jobs transition into roles with more upward mobility.

Haley LOVED the mission. But getting customers was tricky. The founders had to sell each person individually, which was time consuming and produced only a small amount of revenue.

Scaling B2C customer acquisition can be a huge hurdle that requires significant capital to unlock. But it’s not just capital that makes B2C hard. It’s also a matter of having the right team.

After investing in several B2C companies and seeing how hard it was to crack customer acquisition, Haley realized that B2C startups need three key things:

• an experienced marketer on the founding team…
• who wants to have the door shut in their face a hundred times so they can get loads of learnings and figure out the best way to scale
• a path to scalable customer acquisition if they can prove the adoption and retention of the product

2.  It’s really hard to improve unit economics over time

Haley invested in a grocery delivery company that seemed to be solving a big problem – especially since it was COVID and no one wanted to go to the grocery store.

The team seemed sharp, and their tech was cool and differentiated.

But it turns out that the margins in grocery delivery are tough. And it’s rare that they improve over time as more competition enters the market and/or teams try to expand. In year 1, Haley didn’t know enough about the margins of the sector and what it would take to win.

3.  Importance of founder longevity

Haley invested into 2 companies in 2020 that taught her a big lesson around grit. See, it’s normal to invest in pre-seed companies that haven’t quite nailed their solution.

The key is to have a team that is obsessed with customer discovery, gathering learnings, and iterating based on those learnings until they find product/market fit.

One of the companies Haley backed tried 11 different ideas before landing on their current product. Yep, 11.

The other ended up rebuilding their product from the bottom up almost 2 years in. Throughout the journey, the founder sent a monthly update to his investors, sharing all the experiments he ran in the previous month and the learnings from those experiments.

These companies taught Haley the importance of backing founders who have the drive to fail forward and keep going, even when things aren’t going well.

4.  Do your own research

In her first year of angel investing, Haley got introduced to a team that a friend was an early angel investor in.

Haley didn’t know much about the space, but she liked the friend and she liked the founders. She also saw a need for what they were building.

So, Haley invested.

This story is not new. Probably every single investor has backed a company because they respected someone else on the cap table. VCs do this all the time.

Sometimes that strategy works out. And other times it does not.

For Haley, it did not. The company shuttered. And Haley learned the importance of doing her own due diligence on an industry and a problem space before committing to a company.  

There was so much more

The recap you just read represents roughly 20 minutes of conversation between me and Haley. I’m hoping to do a follow-up later this month on some of her learnings in the years since she first started as an investor.

In the meantime, I have a question for you: what was one big learning from your first year of being an investor?

I seriously want to know.