How to Stand Out as an Angel Investor
Brian Nichols is one of our Venture Partners at Hustle Fund and the GM of Angel Squad.
He’s also a prolific angel investor who co-founded and leads Uplyft, the syndicate of 3,500+ angel investors (many of whom are Lyft alums) who’ve deployed over $30 million together across 70+ startups.
We sat down with Brian to dive into his best practices and takes on angel investing. We cover:
- The importance of having mentors to growing as an investor
- Why small checks from many investors are an ideal model
- The qualities that make a truly impressive angel investor
“A good angel investor can handle sourcing, diligence, and all. But, in the grand scheme, what’s most important is what happens after you write that check.”
How angel syndicates uniquely support founder growth
Soon after launching Uplyft, the syndicate gained traction by getting access into highly sought after companies with strong VC lead investors, which led to explosive popularity. The syndicate has boomed from zero to 3,500+ members within three years.
What started out as Brian’s attempt at building a solid investment track record became a vehicle to genuinely assist founders through the power of a (very, very huge) crowd.
He quickly realized countless people in the industry wrongly believe that angel investors cutting $1,000 checks within a syndicate don’t bring much benefit to investments.
In reality, those smaller angels (not the people throwing around unbelievable amounts of cash) become the most helpful to startups — for a few reasons:
- Giving time, not funds — When they can't risk floating $25,000, they're the most likely and willing to roll up their sleeves, do the work, and contribute in more tactical ways, like introducing you to the best people in their network.
- Operator knowledge — Many of these angels are also current industry operators, meaning they have active networks and a better understanding of your day-to-day.
- “Nothing to prove” — Meanwhile, folks writing bigger checks no longer have anything to prove. They usually just write the check and hope that dollar goes up. They're less likely to read investor updates or actively make intros.
All of this has led Brian to feel amped about building syndicates and more communal investing experiences like Angel Squad, which actually present significant value-add.
“Many people seem to think that an angel investing $1,000 within a syndicate isn’t as impactful as someone writing huge checks. That’s simply not true. You can ask any of the founders we’ve invested in and they’ll tell you the same.”
How Brian refined his investing framework over time
Brian has two tactics for evaluating deals and ensuring FOMO doesn’t decide his investments.
1. Start with a formulaic approach
The first is a framework translated into a scorable spreadsheet with about ten columns of the most important inputs and variables to his investing thesis.
It keeps him grounded in trackable performance and potential, rather than getting swept up in excitement, FOMO, and other emotions you experience when seeing cool startups day after day.
After applying this framework to hundreds of deals, it’s become an almost automated process for him. He can look at virtually any deal and calculate its viability in a minute or two.
Of course, every company is dynamic and can’t be totally captured in numbers. But, this has been essential to accelerating his pipeline and dedicating focus to the most promising leads.
2. Have mentors who’ll level with you
Another crucial component to his discipline is regularly speaking with other angel investors (some of them mentors) whom he deeply respects about deal flow.
Two frequent sources of feedback and all-around guidance for Brian are Ann Miura-Ko from Floodgate (who also helped launch Uplyft and has sourced multiple deals that Floodgate led by working with Brian) and the prolific Lenny Rachitsky.
He describes being absolutely thrilled about a deal and ready to invest, only for both of them to share their wisdom on why it's almost definitely not going to work.
These moments (of which there have been many over the years) have only helped him, as he implements some of their beliefs and best practices within his own frameworks.
"It's crucial to learn from mentors you respect. I can't tell you how many times Ann or Lenny has talked me out of deals I was excited about over the years."
What makes an exceptional angel investor: key criteria
As a baseline, Brian expects every solid angel investor to have the essentials down pat: sourcing good deals, thoroughly evaluating them, mapping and winning ideal terms for a round, etc.
What then sets apart good angels from great ones is what comes after the check is signed.
Do you support your founders in every way you can? Are you making intros to other investors or potential recruits? Are you laying your unique skill sets or industry knowledge on the table?
In doing so, you're not only nailing your role as an investor, you're also building a brand in this ecosystem — something Brian takes seriously and advises everyone to do.
As an investor, his work is rooted in deep empathy for the founders he works with.
After all, he was a two-time founder himself. He bootstrapped and grinded while everything in his life — from finances to major relationships — suffered. “All of it was painful.”
With that, he knows all too well that the founder in front of him will likely have a painful journey.
So, he does everything in his power to make that just a bit easier. That could be as small as knowing one person at a super relevant company and taking the time to write that intro email.
“The final piece of the puzzle is putting real time and effort into helping founders. Without it, I don’t think I could consider someone a truly great angel investor.”
.png)
