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

Angel investor network fees confuse everyone at first. Membership fees. Carry percentages. Setup costs. What are you actually paying for? And is it worth it?

Breaking down the cost structure so you can make informed decisions about which networks provide genuine value versus which are just expensive.

The Basic Fee Models

Most angel networks use one of three pricing models. Membership fees only, carry only, or a combination of both.

Membership fees are straightforward. You pay annually or quarterly for access to the network, deal flow, and educational programming. This typically ranges from a few hundred to a few thousand dollars per year.

Carry means the network takes a percentage of your investment profits. If you invest $1,000 and eventually exit at $5,000, you made $4,000 in profit. With 15% carry, the network takes $600 and you keep $3,400.

Combined models charge both membership fees and carry. You pay for access to the network, plus the network shares in the upside if your investments succeed.

What Membership Fees Actually Cover

When you pay membership fees, you're buying several things. First is access to curated deal flow. The network spends significant resources sourcing, screening, and presenting investment opportunities.

Good networks review hundreds or thousands of opportunities annually and surface only the most promising ones. This curation has real value because it saves you enormous time and improves the quality of opportunities you evaluate.

Second is educational programming. Creating quality content with experienced investors and successful founders requires effort and cost. Those weekly sessions don't organize themselves.

Angel Squad's educational structure, for example, includes weekly sessions from experienced VCs covering everything from technical due diligence to cap table dynamics.

Third is community infrastructure. Platforms for discussion, tools for tracking investments, administrative support for closing deals. The operational stuff that makes networks function smoothly.

Fourth is access to the community itself. The value of connecting with other investors, learning from their experiences, and building relationships that compound over time.

Understanding Carry Structures

Carry percentages typically range from 0-20% depending on the network. Higher carry isn't necessarily bad if the value provided justifies it.

Some networks charge 0% carry because they make money entirely from membership fees. Others charge 15-20% carry because that's their primary revenue source.

The key is alignment of incentives. Networks that make money from carry only profit when your investments succeed. This aligns their interests with yours. They're motivated to find good deals, provide quality education, and help portfolio companies succeed.

Networks that only charge membership fees make money regardless of your investment outcomes. Their incentive is keeping you subscribed, not making you a successful investor.

Neither model is inherently better. What matters is whether the specific network provides value matching its cost structure.

Hidden Costs to Watch For

Some networks have hidden costs beyond advertised fees. Setup costs for creating SPVs. Administrative fees per investment. Minimum investment requirements that force you to deploy more capital than you're comfortable with.

Read the fine print carefully. A network advertising "$500 annual membership" might also charge $250 per investment for administration. If you make 10 investments, that's $3,000 in fees you didn't initially account for.

Legitimate networks are transparent about all costs upfront. If you're discovering new fees months after joining, that's a red flag.

As Elizabeth Yin, co-founder and GP of Hustle Fund, emphasizes: "Getting deal flow & education have been the bigger blockers to date" for new investors. Legitimate fees that provide these solve real problems.

Comparing Costs Across Networks

When comparing network costs, you need to normalize for what you're getting. A $2,000 annual membership seems expensive until you realize it includes weekly educational programming, access to 200+ curated investment opportunities annually, and a community of thousands of active investors.

Meanwhile a $500 membership that gives you an email list and quarterly presentations isn't actually cheaper. You're getting far less value per dollar.

Think about cost in terms of value delivered, not just absolute dollars. What deal flow are you accessing? What educational resources are provided? How engaged is the community?

The ROI Calculation

How to think about whether network fees make sense financially: If you invest $10,000 per year across 10 companies and membership costs $1,000 annually, you're spending 10% of your investment budget on access and education.

That seems high until you consider the alternative. Investing solo might save you the $1,000 in fees, but you'll see fewer quality opportunities, make more mistakes, and learn much slower. The value of avoiding just one bad $2,000 investment easily pays for the membership.

You're not paying for guaranteed returns. You're paying to improve your odds of success and accelerate your learning. That's worth something even if individual investments fail.

When Fees Become Unreasonable

Some fee structures are clearly exploitative. Networks charging $5,000+ annual memberships while also taking 20% carry and requiring $10,000 minimum investments. You're paying enormous fees on top of already needing significant capital.

Or networks that charge per deal on top of membership and carry. You're paying three different ways for the same thing.

Reasonable fee structures should feel aligned. You pay for access through membership or carry, not both at maximum levels. The costs are transparent and justified by the value provided.

Free Networks and Their Limitations

Some angel networks are free. No membership fees, no carry. This sounds great until you realize why they're free.

Often free networks are lead generation for other services. They make money selling you on fund management, tax services, or other products. The "free" network is just marketing.

Or they're so large and impersonal that there's no actual community. You get access to deal flow but no education, no support, no relationships. You're paying in opportunity cost rather than fees.

Free isn't bad inherently. Just understand what you're getting and what the network's actual business model is.

Value Beyond Just Fees

The best networks provide value far beyond what you directly pay for. Access to experienced investors who mentor you informally. Relationships with founders who refer other opportunities. Community members who become co-investors on future deals.

This network effect value is hard to quantify but often more valuable than the formal programming. You're not just buying deal flow and education. You're buying access to a community that improves your investing for years.

When evaluating fees, consider both the direct value (deal flow, education) and the indirect value (relationships, reputation, future opportunities).

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." Fee structures that enable portfolio building provide real value.

How to Evaluate If a Network is Worth It

Ask yourself these questions when considering a network:

What deal flow will I access that I couldn't find independently? What will I learn that I couldn't learn for free online? Who will I connect with that I couldn't meet otherwise? How much time will the network save me versus doing everything myself?

If the answers are "not much," the fees probably aren't justified regardless of absolute cost. If the answers are "a lot," even higher fees might be worthwhile.

Membership Fee vs. Carry Trade-offs

Some investors prefer paying higher membership fees with lower carry. They want to keep more upside if investments succeed.

Others prefer paying minimal membership fees with higher carry. They don't want to pay until there are actual returns to share.

As Shiyan Koh, co-founder and GP of Hustle Fund, notes: "Great founders can look like anyone and come from anywhere." Networks that help you find those founders provide value regardless of fee structure.

There's no objectively right answer. It depends on your preference for paying upfront costs versus sharing upside, and whether you value having the network's incentives aligned with your success.

Long-term Cost Considerations

Angel investing is a multi-year commitment. If you're serious about building a portfolio, you'll likely be in a network for 3-5+ years.

Annual membership of $1,000 means $5,000 over five years. That's real money. But spread across 50 investments over that period, it's $100 per investment for access, education, and community.

Viewed through that lens, the costs become much more reasonable. You're not paying $1,000 for one year of value. You're paying for ongoing access to infrastructure that improves your investing for years.

Angel Squad uses a straightforward model focused on accessibility. Members get access to Hustle Fund's deal pipeline (1,000+ opportunities reviewed monthly), weekly educational programming from experienced VCs and successful founders, and a community of 2,000+ active investors learning together. 

Investment minimums are just $1,000, making it possible to build a diversified portfolio without requiring enormous capital. The cost structure is transparent with no hidden fees, administrative charges, or mandatory minimums beyond your chosen investment amounts. For new investors, this combination of low minimums, high-quality deal flow, and structured education provides value that far exceeds the membership cost.

The question isn't whether networks charge fees. It's whether those fees are transparent, reasonable, and justified by the value provided. Good networks make you a better investor in ways that more than pay for themselves over time.