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

Yesterday, a portfolio founder called asking what he should do. He was going through really tough times. Running out of cash. Had to let go of a lot of his employees. The pandemic had not been easy for him. His mental health was in a rough spot.

You're not just investing in a business model. You're investing in human beings who will face extreme adversity. How you show up for them in those moments matters more than your ability to make introductions or give product feedback.

What Actually Makes Entrepreneurship Hard

Here's what makes entrepreneurship hard. It's not one thing. Entrepreneurship combines multiple issues at the same time. You need to find product-market fit, which is the hardest thing to do. You need to hire and retain people with no money, no prestige, just hope. You're constantly trying to fill in gaps when people leave, either temporarily or forever, with no resources. It's like a house of cards being held up by nothing while trying to play whack-a-mole at the same time.

Then there's what happens to people. People get sick or injured. People's loved ones get sick or injured. People start a family. Wrenches get thrown your way all the time. How do you keep going? How do you respond? It's never easy.

This is why entrepreneurship has ups and downs and mostly downs, even if the business is going well. Someone leaving or not being able to get a sale feels like the end of the world. But it will pass. Once, a client went over their ad budget by $45,000 and later wanted it back. The company didn't have the cash. Very stressful. But you work it out and move on.

Perspective and Reframing

Perspective helps. Reframing helps. For many companies growth is slow. You haven't figured out product-market fit. Founders often look at the slope of the curve and what's ahead more than the progress. But if you look back at all the things you've figured out since you started, you should be proud of yourself. If you're methodical about the steps you're taking, you'll get there. It's just a matter of time and putting these thoughts aside.

Moral support and community help. The irony is that most founders who are starting out don't really have community. But that's probably when they need it most to help figure things out when you don't know what you are doing.

Coaches help too. Many people have a coach for fitness or a therapist. They keep you accountable, help you figure out how to improve, and push you. Some investors used to think they were a waste of money, but later realized it's one of the best investments you can make in yourself. When everything is falling apart around you, and you feel the weight of your team and your team's families and friends, it's important to keep your head in the game. Take steps to build mental infrastructure so you can stay strong when you need to.

Things That Go Wrong

The things that can go wrong are almost unbelievable until you see them yourself. 

Two people in a relationship start a company together and break up while running the company. One founder had to figure out how to work out a deal with her ex-husband and former co-founder to get him off the cap table.

Another founder overstayed his visa in the US. This is obviously a big deal. This was a precarious situation, and the company likely would have slowed or shut down if they moved back home. Fortunately, there were friends in Canada who could help them move there.

Many, many, many founders unfortunately face co-founder deaths or illnesses or family health issues. Even if everything is going well, this is incredibly common and often leads to company shutdowns.

These things are shocking, but they happen. So many things can go wrong in ways you cannot predict. You think you've seen it all, and yet there'll be a new variation tomorrow.

What VCs Actually Do All Day

If people wonder what VCs do all day, certainly the bulk of the work is the usual stuff: fundraising, meeting new companies, working with portfolio companies.

But firefighting is something you don't hear VCs talk about in detail. If you have a larger portfolio, regardless of whether you're a fund manager or a micro angel, statistically speaking, you will be firefighting. Startup investing is about people. And things happen to people or people make poor decisions.

If you don't like dealing with people and their issues, investing in startups won't be fun. The number one complaint about startup investing is that people don't realize they would have to mediate or deal with lots of people problems.

The Real Value Add

Here's the surprising thing. The biggest value-add isn't making introductions or providing strategic advice. It's just being that friend who is there when the world seems to be falling apart. Being a lending ear. A shoulder to cry on. Sometimes having a few encouraging words so the founder walks out feeling a bit better.

Ultimately, doing a startup is all about morale control. In the beginning, morale is so high because of sheer excitement. Later, you make progress but morale often drops. And you have more than you started. Why? Clearly people's spirits are not always correlated with absolute progress in the business. It's correlated with how they feel. And that is what investors can impact the most, for better or worse.

This is why the things that matter most are: How are founders doing as people? You can't even think about building a great company if you're falling apart yourself. How can you help make a situation more positive even if it's crappy? At least try to do that.

How Angels Can Actually Help

For angels supporting founder mental health, the work is less about having answers and more about being present. Creating space for founders to be honest about struggles. Normalizing the difficulty instead of pretending everything should be easy. Connecting founders with each other so they realize they're not alone.

The best investors build founder communities where people at the same stage can support each other. Accelerators do this well. Cohort-based courses. Coworking spaces. Portfolio companies of a shared investor. These communities keep you accountable and provide the moral support that helps founders survive the downs.

When you're considering where to deploy your angel capital, think about whether you're prepared for the human side of this work. Can you take a call at 11pm when a founder is spiraling? Can you help them reframe a disaster into a setback? Can you be honest about when pivoting or shutting down might be the healthier choice?

Supporting founder wellbeing isn't a distraction from returns. It's directly connected to returns. The companies that survive aren't always the ones with the best initial ideas. They're the ones where the founders maintain their mental health long enough to figure it out. For angels looking to support portfolio company wellbeing while building their own community of experienced investors who understand these challenges, Angel Squad provides the network and resources to become the kind of investor founders actually want on their cap table when things get hard.