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

Individual investors face a fundamental disadvantage in startup investing: the best opportunities often get funded before you hear about them. VCs with extensive networks, active sourcing operations, and strong reputations see deals that never reach broader markets. By the time opportunities appear on platforms or through casual networks, they've often already been picked over.

Co-investment alongside VC funds provides a backdoor through this barrier, giving you access to deal flow that would otherwise remain invisible.

The Deal Flow Quality Problem

The challenge isn't that good startups don't exist. It's that good startups have choices about who invests in them, and they typically choose professional investors with relevant expertise and helpful networks. A promising founder with a compelling company doesn't need to broadcast their fundraise widely. They reach out to investors they want, get term sheets from those investors, and close their rounds.

This dynamic creates adverse selection in deal flow that reaches individual investors through open channels. The startups actively seeking individual angels often couldn't attract institutional interest. That doesn't mean they're all bad, but it does mean the quality distribution skews lower than what VCs see.

VCs see deal flow that individual investors don't because of structural advantages in sourcing. They have reputations that attract inbound from quality founders. They have networks that generate warm introductions. They have portfolio companies whose founders know other founders. They have bandwidth to actively source rather than passively waiting.

The math is stark. A top VC fund might review 1,000+ opportunities annually and invest in 20. The 20 they select represent heavy filtering against quality criteria. Individual investors see different deal flow entirely, often without any institutional filtering applied.

As Elizabeth Yin, co-founder and GP of Hustle Fund, explains: "Getting deal flow & education have been the bigger blockers to date" for new investors.

The deal flow problem is the fundamental blocker because everything else depends on having quality opportunities to evaluate.

How Co-Investment Provides the Backdoor

When a VC fund offers co-investment to community members, they're sharing access to their proprietary deal flow. You're not seeing random companies that applied to a platform. You're seeing companies the fund sourced, evaluated, and decided to back with their own capital.

This backdoor access leverages the fund's structural advantages for your benefit. Their reputation attracted the deal. Their network provided the introduction. Their evaluation filtered quality. Their negotiation set fair terms. You participate in all of that without replicating any of it.

The quality difference is substantial. Hustle Fund reviews over 1,000 applications monthly and selects a small percentage for investment. When Angel Squad members see co-investment opportunities, they're seeing companies from that heavily filtered set. The baseline quality exceeds what any individual could source independently.

This isn't charity from the fund. As discussed previously, funds benefit from engaged communities in multiple ways. But the alignment of interests means the backdoor is genuinely valuable, not a consolation prize. You're accessing the same quality they're investing in, just at different scale.

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."

The backdoor provides the quality deal flow that makes bigger, better portfolios possible.

What Makes This Backdoor Valuable

The value compounds beyond simple access to better deals. The educational dimension is significant because seeing what VCs actually invest in teaches you patterns about quality that you couldn't learn from rejected deals.

When you evaluate 20+ co-investment opportunities over a few years, you absorb implicit knowledge about what institutional investors find compelling. You see how they think about team evaluation, market sizing, competitive dynamics, and timing. This education through exposure accelerates your development as an investor.

The confidence that comes from institutional validation helps with decision-making. When you're evaluating a company that a reputable fund has decided to back, you start from a position of reasonable confidence rather than pure uncertainty. You're not trying to determine if the company is fundamentally sound. You're determining if it fits your personal portfolio and criteria.

The network effects of participating in VC-backed companies create value over time. Portfolio companies with institutional backing tend to have stronger support systems, better governance, and more resources for the journey ahead. Your position in those companies connects you to stronger ecosystems than investments in companies without institutional support.

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

The backdoor exposes you to diverse founders the fund identified through their broad sourcing, not just founders visible through your personal network.

Maximizing the Backdoor Opportunity

Simply having access isn't enough. You need to engage effectively to capture the value the backdoor provides.

Evaluate seriously even when relying on fund judgment. Co-investment opportunities deserve your genuine consideration, not rubber-stamp approval because the fund is participating. Ask yourself whether the opportunity makes sense to you, whether you understand the thesis, and whether anything concerns you. Fund participation is positive signal, not replacement for your own thinking.

Build portfolio rather than cherry-picking. The temptation is to participate only in opportunities that seem most exciting. This approach misses the point of diversified portfolio construction. Invest consistently across opportunities that meet basic criteria rather than trying to identify the single best deal from each batch.

Track your experience systematically. Document which opportunities you invested in, which you passed on, and why. Review periodically to see how your decisions performed. This feedback loop accelerates learning and helps you calibrate how much weight to give fund participation versus your own assessment.

Engage with education alongside deals. The backdoor to deal flow is valuable, but so is the educational programming that helps you evaluate what you're seeing. Angel Squad's weekly sessions with Hustle Fund GPs provide context for understanding why certain opportunities attracted fund interest and how to think about evaluation.

Angel Squad provides the backdoor: co-investment access in companies Hustle Fund is backing, $1,000 minimums enabling proper portfolio construction, educational programming from the GPs making investment decisions, and peer community of 2,000+ members for discussion and shared learning. The backdoor to top deal flow is open. The question is whether you'll walk through it.