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

Canada gives startups massive grants that reduce tech talent costs by 3-5x compared to San Francisco. That's not a typo. One of Hustle Fund's portfolio companies set up a Canadian entity specifically to take advantage of this.

This matters because government startup support has become one of the biggest variables in angel investing. The companies that crack these programs can suddenly operate at half the burn rate of their competitors. They extend runways. They get to product-market fit with less dilution. For angels, that's the difference between a company that survives and one that doesn't.

The Hidden Value Beyond Money

Government support isn't just about the money. It's about the doors that open once you're in these programs. Accelerators in particular have turned into ecosystem connectors more than funding sources.

Most accelerators in the US now take 5-8% equity for $100k-$150k. Abroad, the equity stakes can be higher or the dollar amounts invested are lower. So you need to do your homework on whether the dilution makes sense. 

The real question founders should ask: if your goal is to raise $1 million at the end of the accelerator program, how many companies in each batch actually do this? There will always be that one company that defies the norm, but you want to learn what is the norm.

Fundraising success varies wildly from program to program. Obviously, part of that is related to you as the entrepreneur and your abilities. But accelerators that have greater networks to investors have a higher percentage of their companies raise more money. If there's a demo day, how many actual investors versus corporates and mentors come? How many companies in the last batch raised $1 million or more?

Geographic Arbitrage and Capital Controls

Singapore has become another interesting case study. They've created a regime that draws in wealthy people through very low to no tax structures. The area seems to be thriving and the coffers of the Singaporean government are quite healthy. This creates a concentration of capital that benefits early-stage companies in the region.

The flip side of government support is capital controls. China has massive amounts of wealth, but the Chinese government doesn't love it when you take Chinese yuan and move it abroad. They don't want capital outflow; they want capital inflow. So they make it really difficult. With the current economic tensions between the US and China, this has become even more restrictive.

For angels, this means you need to think geographically about where startups can actually move money. A brilliant company in Beijing might struggle to accept your US dollar investment or pay contractors outside China. These aren't small technical details. They're structural barriers that affect whether a company can scale globally.

The New Geography of Startups

The landscape has fundamentally changed over the past five years. Five years ago, it seemed weird or impossible to have portfolio companies in Asia selling globally or Southeast Asian companies selling to the US. Today, this makes a lot of sense for the right business. When you look at global portfolios now, you can't quite bucket so many companies. They might be SF-based with a US corporation but have most operations and developers in another country. Or a Singapore incorporated company that sells to the US.

There's no clear cut geography anymore. Founders who can navigate this new way of hiring, managing remotely with hub and spoke models, and selling remotely are at a serious advantage in this new economy.

The companies that win are the ones that stack advantages. Canadian grants for talent costs. US market access for revenue. Asian development teams for execution speed. Government programs are just one piece of the puzzle, but they're a piece that can give startups breathing room when capital is tight.

Questions Angels Should Be Asking

Angels should be asking founders: what programs have you applied to? What grants are you receiving? How are you thinking about geographic arbitrage for talent and customers? The answers reveal whether a founder is being scrappy or just burning through capital the expensive way.

During COVID, Hustle Fund sent an email to all portfolio founders about the changing fundraising landscape. We debated sending it because they didn't believe in inciting panic, but they truly believed there was going to be a change. The public markets were crashing, and public markets are highly correlated with angel investments in startups. When angels see their net worth dropping, they're less likely to invest in startups. When people become fearful, they tend to be less risk averse and go into wealth preservation mode.

This meant startups needed to prioritize speed over things like valuation when raising. Not to take bad deals, but not to try to over-optimize. For companies thinking about raising in a month or two, the advice was to consider raising some money right now. You can never time the market, but reducing burn and prioritizing revenue and profitability has never seemed so important.

Government programs become even more critical during these periods. When private capital tightens, public capital can be the difference between survival and shutdown.

The future of angel investing isn't just about picking great founders or hot markets. It's about understanding the policy environment that gives certain startups structural advantages. The angels who learn to read these trends will find opportunities everyone else misses. For those looking to navigate this complex landscape with a community of experienced investors who understand these global dynamics, Angel Squad provides the network and knowledge base to spot these opportunities before they become obvious.