Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

I've made approximately $1 million in angel investing mistakes over 15 years. Not lost investments (though there are those too), but actual strategic errors that cost real money and opportunity.

Here are the expensive lessons so you don't have to learn them yourself.

Mistake 1: Concentrated Bets Based on Conviction ($200K+ Cost)

What I did: Early in my investing, I varied check sizes dramatically based on conviction. Companies I loved got $25,000-50,000. Companies I felt uncertain about got $5,000. I trusted my ability to identify winners.

What happened: My conviction correlated weakly with outcomes. Some heavily funded investments failed completely. Some small "obligation" investments became my best returns. I'd have been better off with consistent sizing.

The math: If I'd invested consistent amounts across all opportunities rather than concentrating based on conviction, portfolio would be worth approximately $200,000+ more today based on actual outcome distribution.

The lesson: Your conviction at early stages is unreliable signal. Outcomes depend on factors invisible during evaluation. Consistent check sizes produce better results than conviction-weighted concentration.

As Elizabeth Yin, co-founder and GP of Hustle Fund, explains: "Most of your investments will return $0. You will lose money. So it's important to have great portfolio construction."

I learned this truth the expensive way through concentration mistakes.

Mistake 2: Inadequate Diversification ($150K+ Cost)

What I did: First three years, I made only 12 investments. I wanted each investment to be "high quality" based on extensive diligence. I believed careful selection could substitute for diversification.

What happened: My 12-investment portfolio had no outsized winners. The power law requires more attempts to capture outliers. I simply didn't have enough shots on goal.

The calculation: Expected value of 20-investment portfolio significantly exceeds 12-investment portfolio because odds of capturing crucial 20x+ winner increase substantially with more investments.

What it cost: Estimated $150,000+ in expected value lost by under-diversifying. More investments would have produced better outcomes statistically.

The lesson: Portfolio size isn't optional. 20-25 investments minimum is necessary for adequate diversification. Careful selection doesn't substitute for sufficient quantity.

Mistake 3: Following Hot Deals Without Thesis ($100K+ Cost)

What I did: When prominent investors announced participation in deals, I often followed without independent thesis. I assumed their diligence was sufficient. I invested because smart people were investing.

What happened: Following without thesis meant I couldn't evaluate when situations changed. I didn't know when to cut losses or double down. I was passive passenger without informed perspective.

The pattern: Roughly 40% of my "follow" investments returned zero compared to 30% of investments where I had independent thesis. The difference is statistically meaningful and expensive.

What it cost: Approximately $100,000 in excess losses from following without understanding. Social proof substituted for actual evaluation.

The lesson: Every investment needs your own thesis, not just "smart people are investing." Your thesis enables ongoing assessment and informed decisions throughout company lifecycle.

Mistake 4: Abandoning Portfolio During Boring Years ($180K+ Cost)

What I did: Years 4-6 of my investing journey, engagement dropped dramatically. No exits were happening. Updates were boring. I stopped attending educational sessions, reduced deal review, and made minimal new investments.

What happened: During this disengaged period, I missed opportunities that became significant winners. My portfolio construction slowed exactly when I should have been completing diversification.

The calculation: Opportunities I passed on during disengaged years would be worth approximately $180,000+ based on current valuations. I missed them because I wasn't paying attention.

The lesson: The boring years (4-7) are when discipline matters most. Maintaining engagement through uncertainty is essential for capturing opportunities that drive portfolio returns.

As Eric Bahn, co-founder and GP of Hustle Fund, emphasizes: "For beginners, a bigger startup portfolio is better. It helps with diversification and helps you learn and get reps in. Investing requires practice like everything else."

I stopped practicing during critical years and it cost me significantly.

Mistake 5: Operational Failures ($75K+ Cost)

What I did: Early investments were unorganized. I lost track of some investments entirely. I missed follow-on opportunities because I didn't know rounds were happening. I failed to track outcomes systematically.

Specific failures: Missed two follow-on opportunities in companies that became strong performers (estimated $50,000+ cost). Lost documentation for investments requiring extensive reconstruction ($10,000+ in legal and administrative costs). Tax filing errors due to poor tracking ($15,000+ in penalties and corrections).

What it cost: Approximately $75,000 in direct costs and missed opportunities from operational failures.

The lesson: Track everything from day one. Document theses, terms, and contact information. Maintain organized records. Operational discipline prevents expensive mistakes.

Mistake 6: Solo Investing Without Community ($100K+ Estimated Cost)

What I did: First 5 years, I invested independently without community support. Sourced deals through personal network. Negotiated terms individually. Learned through expensive trial and error.

What happened: Deal flow was limited and inconsistent quality. Learning was slow without feedback. Engagement was difficult to maintain without accountability. Many mistakes could have been avoided with community wisdom.

The comparison: After joining community, learning accelerated dramatically. Deal flow quality improved. Operational burden decreased. Mistakes decreased because of shared knowledge.

Estimated cost: Conservatively $100,000 in avoidable mistakes, missed opportunities, and inferior deal flow during solo years compared to community-supported investing.

The lesson: Community infrastructure isn't optional luxury. It's essential for sustainable, successful angel investing. The "savings" from avoiding membership are false economy.

Mistake 7: Ignoring Domain Expertise ($95K+ Cost)

What I did: I invested across all sectors equally despite having deep expertise in healthcare from my career. I thought diversification meant ignoring my knowledge advantage.

What happened: My healthcare investments outperformed other sectors significantly. I had better evaluation ability in my domain. Spreading investments equally across sectors diluted my advantage.

The calculation: If I'd concentrated 60-70% of investments in healthcare (my expertise area) rather than 15%, portfolio performance would be approximately $95,000+ better based on sector-specific returns.

The lesson: Domain expertise is valuable edge. Concentrate investments where you have genuine knowledge advantage while maintaining some diversification. Your expertise is worth leveraging.

As Shiyan Koh, co-founder and GP of Hustle Fund, notes: "Great founders can look like anyone and come from anywhere."

But your ability to recognize great founders is stronger in domains where you have genuine expertise.

The $1M Summary

Concentration mistakes: $200,000+. Inadequate diversification: $150,000+. Following without thesis: $100,000+. Portfolio abandonment: $180,000+. Operational failures: $75,000+. Solo investing: $100,000+. Ignoring expertise: $95,000+.

Total: Approximately $900,000-1,100,000 in mistakes over 15 years. Real money that could have been avoided with better education and community support upfront.

What Would Have Prevented These Mistakes

Structured education: Learning portfolio construction fundamentals before investing would have prevented concentration and diversification mistakes. Community programming teaches these principles systematically.

Community wisdom: Hearing from experienced investors would have warned against following without thesis and abandoning during boring years. Shared knowledge prevents individual mistakes.

Operational infrastructure: Community platforms handling documentation, tracking, and administration would have prevented operational failures. Infrastructure solves problems individuals struggle with.

Peer accountability: Community engagement creates rhythm that sustains practice through boring years. Accountability prevents the abandonment that cost me significantly.

Learning From My Mistakes

For new investors: You don't have to make $1 million in mistakes to learn these lessons. Community education teaches principles. Peer wisdom warns against common errors. Infrastructure prevents operational failures.

The math: Angel Squad membership costs $3,500. My avoidable mistakes cost approximately $1,000,000. Even preventing fraction of these mistakes represents enormous return on community investment.

Start smarter: Join community before making first investment. Learn from experienced investors who've made mistakes. Use infrastructure that prevents operational failures. Maintain engagement through accountability.

Angel Squad provides this protective infrastructure: structured education teaches portfolio construction before you make concentration mistakes, community wisdom warns against common errors, operational infrastructure prevents tracking and documentation failures, and peer accountability sustains engagement through boring years.

My $1 million in mistakes is your free education. Learn the lessons without paying the tuition.