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

The instinct when starting something new is often to go big to demonstrate commitment. In startup investing, this instinct is wrong. Starting small and learning fast produces better investors than jumping in with large checks and expensive lessons.

This is why small-start strategy works and how to implement it.

Why Starting Small Works

Affordable mistakes: Every beginner makes mistakes. At $1,000 per investment, mistakes cost $1,000 not $25,000. Learning happens either way, but tuition is much cheaper.

Volume enables learning: With $20,000 budget, you can make 20 investments at $1,000 or 2 investments at $10,000. Twenty investments provide twenty learning opportunities. Two investments provide two.

Reduced pressure: $1,000 decisions carry less psychological weight than $25,000 decisions. Lower pressure enables clearer thinking and better judgment development.

Portfolio approach: Small checks enable proper portfolio construction. You can actually build 20+ investment diversification that the math requires.

Sustained practice: Small consistent investments create sustainable rhythm. Large sporadic investments create feast-or-famine pattern that disrupts learning.

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."

Small checks enable the portfolio construction that absorbs inevitable losses.

The Small-Start Framework

Check size: $1,000 per investment. Same amount every time regardless of conviction.

Portfolio target: 20+ investments over 2-3 years. Proper diversification at accessible total commitment.

Pace: 6-8 investments per year. Approximately quarterly rhythm. Consistent rather than sporadic.

Total commitment: $20,000-25,000 over full deployment period. Significant but not overwhelming.

Timeline: Build portfolio over 2-3 years. Wait 7-10 years for outcomes. Decade-long commitment.

How Rapid Learning Works

Learning through volume: Each investment is data point. Seeing 20+ opportunities, making 20+ decisions, observing 20+ outcomes provides rich learning dataset.

Pattern recognition development: After evaluating 50+ opportunities (investing in subset), patterns become visible. Strong teams look different from weak teams. Good markets become recognizable.

Mistake identification: Enough investments to see where your judgment was wrong. What did you miss? What did you overweight? Feedback loop requires volume.

Calibration improvement: Compare predictions to outcomes across multiple investments. Systematic review reveals biases and blind spots.

Thesis refinement: Each investment forces articulation of reasoning. Reviewing theses against outcomes refines thinking over time.

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."

Small checks enable the many reps that build expertise.

Implementing Small-Start Strategy

Month 1-2: Foundation Build knowledge base. Portfolio construction, investment structures, evaluation basics. Don't invest yet.

Month 3: Community joining Join community providing $1,000 minimum investments. Angel Squad offers Hustle Fund's curated deal flow at accessible minimums.

Month 4-5: Observation Review every opportunity presented. Practice evaluation. Build pattern recognition without capital at risk.

Month 6: First investment Select opportunity meeting criteria. Invest $1,000. Document thesis.

Months 7-18: Portfolio building Continue quarterly investment pace. Review, evaluate, invest. Build toward 10-12 investments in first year.

Months 19-36: Completion Finish portfolio construction. Reach 20+ investments. Maintain engagement while waiting for outcomes.

Learning Acceleration Tactics

Tactic 1: Document everything Write thesis for every investment before committing. Review theses after 1-2 years. What was right? What was wrong?

Tactic 2: Review non-investments too Write brief assessment of opportunities you passed on. Track outcomes. Learn from what you didn't invest in as much as what you did.

Tactic 3: Compare with experienced investors In community, see how others evaluate same opportunities. Where does your assessment differ? Why? What can you learn?

Tactic 4: Seek feedback Discuss your evaluation thinking with peers and mentors. Different perspectives reveal blind spots.

Tactic 5: Study failures systematically When investments fail, analyze what you missed. Look for patterns across failures. Build "avoid" criteria from experience.

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

Learning to recognize diverse founders requires exposure volume that small-start approach enables.

Small-Start vs. Big-Bet Comparison

Big-bet approach:

• 3-5 investments at $5,000-10,000 each
• High stakes per decision
• Limited learning data points
• Concentration risk
• Fewer mistakes but expensive ones

Small-start approach:

• 20+ investments at $1,000 each
• Low stakes per decision
• Rich learning dataset
• Proper diversification
• More mistakes but affordable ones

Outcome comparison: Big-bet approach produces more anxiety, slower learning, and worse risk management. Small-start approach produces faster learning, better diversification, and sustainable practice.

When Small-Start Might Not Apply

Scenario 1: Already experienced investor If you have extensive investment experience (public markets, real estate, private equity), some learning transfers. Still recommend starting smaller than your experience might suggest.

Scenario 2: Significant wealth seeking deployment If you have $1M+ to allocate to angel investing, $1,000 checks may be impractically small. Consider $2,500-5,000 still building 25+ investment portfolio.

Scenario 3: Syndicate with higher minimums Some quality syndicates require $5,000+ minimums. Trade-off between access quality and check size flexibility.

Even in these cases: Principle of learning through volume still applies. Build larger portfolio rather than concentrating.

The Learning Curve

Investments 1-5: Novice Following process mechanically. High uncertainty. Relying heavily on external signals (other investors, community guidance).

Investments 6-15: Developing Criteria sharpening. Pattern recognition emerging. Starting to form independent judgments.

Investments 16-25: Capable Confident evaluation. Clear personal thesis. Able to articulate reasoning. Still learning but foundation solid.

Investments 26+: Experienced Refined approach. Quick evaluation. Strong pattern recognition. Learning continues but at refinement level.

Timeline: This progression happens over 2-4 years of active investing. Small-start approach accelerates by providing more data points.

Sustaining Momentum

Challenge: Maintaining engagement through boring middle years when nothing seems to happen.

Solution 1: Keep investing. New investments maintain engagement. Don't stop building portfolio even when early investments seem dormant.

Solution 2: Stay connected. Community programming, peer discussion, and deal evaluation keep you active.

Solution 3: Track and review. Regular portfolio review and thesis assessment creates engagement even without company news.

Solution 4: Celebrate learning. Progress isn't just returns. Knowledge accumulated, patterns recognized, and judgment improved are real progress.

Angel Squad supports small-start approach: $1,000 minimums enable proper portfolio construction, curated deal flow from Hustle Fund provides quality opportunities for learning, weekly education accelerates development, and community maintains engagement through challenging periods.

Start small. Learn fast. Build portfolio. Develop judgment. The investors who start with disciplined small-check approach become better investors than those who start with concentrated big bets. Trust the process.