Angel Investing: The Cheat Code to Finding the Best Jobs
A few weeks ago I stumbled across an article on LinkedIn written by Chris Kong, angel investor who recently launched a blog called Ante Up. Below is Chris’ piece about how angel investing can help you find the best job at any stage of your career.
BTW - Chris is also a member of Angel Squad, a community and education platform that helps you learn how to become a smarter angel investor.
Angel Squad gives you the opportunity to invest in the top 10% of Hustle Fund’s portfolio... and learn why we're investing too. Apply to join here.
Now, on to Chris’ article.
There are two kinds of companies in the startup world: hot, pre-IPO companies, and early-stage startups.
The former are easy to spot.
The latter are much harder to find. And even harder to value. But these companies can set employees up for true financial freedom.
For operators who want to join an early-stage startup with massive equity opportunities, angel investing can help.
Here’s how:
Those new to angel investing can start by joining platforms like AngelList or Angel Squad and investing as little as $1,000 per deal.
By simply looking at a bunch of different early-stage startups, you’ll gain broad perspectives on the startup ecosystem, spot trends, and identify emerging market opportunities.
Then, once you start investing, you’ll be able to track startups' progress from the founders' monthly/quarterly updates. The updates allow you to track their progress and identify break-out companies.
Combining these insights with a much broader network will provide you with the ultimate cheat code to find startup jobs with potential for huge financial upsides.
Let's dive into why angel investing can help you plan your next career move.
Broad Perspectives
Most tech employees have extremely demanding jobs. They spend their time zeroed-in on their team's goals, metrics, and KPIs.
But as an angel investor, you get a broader view of startups and the tech ecosystem. My fellow Hustle Fund Angel Squad member, Ryan Endacott, articulates this well:
“Angel investing has given me exposure to many more perspectives on startups/biz. Felt like I only had one piece of the puzzle before, and now I can see the whole system in action from different points of view. Lends to a much greater understanding of what's going on.”
Let's use early-stage startups as an example. By angel investing, you’ll learn what to look for in startup founders, from their domain expertise, to their scrappiness, to their coachability.
You’ll gain a first-hand perspective of what it’s like to be a founder building a business from scratch while juggling fundraising and managing the business’ runway.
And as an angel investor, you will be able to provide value alongside your small check.
For example: providing subject matter expertise, making intros to potential investors and new hires, and offering feedback on landing pages and sales decks.
Find Breakout Companies before TechCrunch
Startups often hold off announcing their fundraising rounds on sites like TechCrunch for six months or longer.
Why? To leverage the positive news for product marketing and soft launch their next fundraising effort.
In other words, by the time you read about certain hot startups, founders might have already filled the position you want… or the equity value increased by 5x.
But as an investor, you get previews of what founders are working on before it becomes well-known.
You’ll learn about web3 startups at investor meetups, and get introductions to up-and-coming companies from other founders and investors.
Build Network instead of Networking
Any time hot startups post their high-paying jobs online, the recruiting process for those jobs becomes very competitive.
However, startup founders will often ask their investors for introductions to potential candidates before the job is publicly posted.
Or (let’s be real) before the job description is even written.
If your founders are looking to fill a role that excites you, fantastic. You already have an in.
But other times founders will include other “asks” in their monthly updates… like for intros to potential investors or customers. They’ll ask for tactical advice on hiring, product, or financial planning.
These are opportunities for you to build rapport with the startup. By responding with your advice or introductions, you’re proving your value and setting the stage for a potential role at the company in the future.
Joining Early-Stage Startups
The biggest financial upside to joining an early-stage startup is equity.
Most seed-stage companies don’t have the capital to offer competitive salaries. So, they offer equity to their early hires.
Now, there’s no doubt that early-stage companies are risky. And there isn’t a great way to assign value to early-stage equity.
That’s why investing early is smart: angel investors can compare opportunities and valuations among early-stage startups, and evaluate which opportunities are good ones.
Below is a Twitter thread about joining a seed-round startup vs. Series A. None of this is an investment or career advice, but it's a novel way to look at how to choose early-stage companies.
Series A is now the worst stage to join a startup.
And early-stage employee compensation reflects this historical risk between stages in the equity component: Series A stock grants are commonly 100% lower than at Seed for key hires, while salaries are virtually identical.
But, in the last few years, raising the Series A has become all but inevitable for most reasonably well-positioned seed stage startups. And the time between these rounds is commonly compressing to less than a year.
So joining a company at Seed is now a very comparable risk to joining at Series A.
But the compensation you'll receive for that risk will likely be at least 100% greater at Seed than at A.
With more and more operators starting to invest, I believe angel investing is the new networking for future job opportunities. Your next dream role could be at your portfolio company.
This is just an excerpt from Chris’ original article. To read the full article, or to explore some of Chris’ other posts, check out his Twitter.
And if you want to connect with Chris and other angel investors like him, consider applying for Angel Squad! More info here.