Investment Thesis

by Haley Bryant March 28th, 2022

What is an investment thesis?

An investment thesis is a strategy for making money. It typically communicates what investors invest in (or don't) and why, and their beliefs about what makes startups successful broadly or by stage and/or sector.

Why are investment theses important?

An investment thesis enables consistent, disciplined decision making and investing.

Investors may develop a thesis to use across their entire fund or for each investment. Your investing thesis should evolve over time as you have new experiences and consume new information.

Although every deal is different and can go right or wrong for an infinite number of reasons, one thing you can control is the consistency with which you analyze them. By using a similar methodology with each deal, you will be able to quantify one deal over another and use your hard-earned money on the bets that you deem to be the best for you. This will also help you understand how your investment thesis changes over time, for better or for worse. - Brian Nichols, Angel Squad
The best startup investors are constantly re-evaluating their approach and thesis — I certainly have evolved my own thinking over the past years. - Elizbath Yin, Introducing Angel Squad: enabling the next 10k angel investors

At Angel Squad, we share the Hustle Fund Deal Assessment Framework as a jumping off point to help angel investors create a thesis and consistently grade companies against it. We believe that the best way to become a better investor is to put pen to paper and get a lot of reps of practice in evaluating companies.

FAQs

Do I have to have an investment thesis to start angel investing?

No! While some investors start their journey with a thesis, many build it over time based on lived experience working with founders and seeing them execute.

What is Hustle Fund's investment thesis?

Our thesis is really simple. We think that the leading indicator of success is a hustle. For us, the hustle is defined as great execution, meets high velocity and we find that teams that ship a lot of code, run a lot of experience, and try very hard at sales pipeline processes tend to grind out the best businesses over time. Pre-seed investing and seed investing is largely an exercise of assessing the potential of the founders. - Eric Bahn

What are some other examples of investment theses?


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