Thinking about writing your first check? A grounded guide to portfolio construction, diligence and being a helpful investor.
Angel investing can be one of the most rewarding ways to support founders — and one of the riskiest asset classes there is. Going in with realistic expectations makes all the difference.
Plan for a portfolio, not a single bet
Most startups fail, and returns are driven by a small number of outliers. Experienced angels aim for 15–25 investments over several years, sized so that losing any one of them would not hurt. Only invest money you can afford to lock up for ten years or more.
Do focused diligence
You do not need a hundred-page report. Focus on the team, the problem, early evidence of demand, and the terms. Talk to a few customers if you can. Ask founders what would have to be true for the company to become very large.
Understand the instruments
Learn how SAFEs, convertible notes and priced rounds work, including pro-rata rights and information rights. When in doubt, invest alongside an experienced lead whose terms you can review.
Be the investor founders want
Respond quickly, make thoughtful introductions, and stay out of the way when you are not needed. Your reputation among founders is what brings you the best opportunities over time.
Joining a community of fellow investors — sharing diligence, co-investing and comparing notes — is one of the fastest ways to learn. That is exactly why we built our investor network.