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

After making first 20 investments and seeing early outcomes, patterns emerge. Some lessons you can only learn through experience. Others could be taught upfront if anyone bothered.

The crucial insights I wish someone told me before I started.

Your Conviction Is Mostly Noise

First investments feel different. Some opportunities excite you enormously. Others seem fine but underwhelming. Natural instinct is investing more in exciting opportunities and skipping or minimizing lukewarm ones.

This instinct is wrong. Your conviction about specific deals is noisy signal that misleads as often as guides. The companies you're most excited about fail at same rates as others. Investments you make almost as afterthought sometimes become best outcomes.

Why this happens: At pre-seed/seed stages, outcomes are dominated by factors you can't evaluate from outside. Whether team navigates pivots successfully, whether market timing is exactly right, whether they handle founder conflicts productively.

Your conviction is based on visible factors (pitch quality, founder charisma, obvious market size) that correlate weakly with actual success. Important factors are invisible until much later.

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."

That portfolio construction requires ignoring conviction and maintaining consistent check sizes across all investments.

What I wish I'd known: Don't vary check sizes based on excitement. Invest exactly $1,000 in each of first 20 companies regardless of conviction level. Your judgment improves over time but never becomes reliable enough to justify concentration.

Portfolio Size Matters More Than You Think

Twenty investments seems excessive to beginners. Why not make 8-10 really good bets instead of 20 mediocre ones?

Math doesn't support this thinking. With 8 investments, odds of capturing that crucial 20x+ winner are much lower than with 20 investments. You're not reducing quality by expanding quantity, you're improving odds of adequate outcome distribution.

The power law is brutal. Most of your returns come from 1-2 investments out of 20. Without those outliers, portfolio barely breaks even or loses money. More investments means better odds of capturing outliers.

What I wish I'd known: Build toward 20-25 investments minimum, not 12-15. The incremental investments (numbers 16-25) often contain the outliers that make portfolio work. Stopping at 15 because you're tired is exactly wrong moment to stop.

First 20 investments are essentially buying lottery tickets. You need enough tickets in the draw to have reasonable odds of winning.

Waiting Is the Hardest Part

Beginners obsess about evaluation and decision-making. Is this the right company? Am I making good choice? These questions feel important and occupy mental energy.

Reality: Evaluation matters but it's brief phase. Most time is spent waiting 7-10 years for outcomes. Years 2-5 are psychologically brutal. No exits occur. Companies are building but progress is ambiguous. You have no idea which investments will succeed.

Maintaining engagement through boring uncertain years separates successful long-term angels from those who quit. Most abandonments happen during years 3-5, before any meaningful outcomes materialize.

What I wish I'd known: Prepare mentally for long waiting period. Build sustainable routines that persist through boring years. Join community providing structure. The waiting is harder than evaluation, and nobody warns you about this.

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."

That practice includes practicing patience through years when nothing interesting happens.

Track Everything From Day One

Early investments, you think you'll remember details. You won't. After investment 15, you can't recall why you invested in half your portfolio without notes.

Proper tracking from start enables learning. Document investment thesis before committing capital. What excites you? What are risks? What does success look like? Update quarterly with company progress.

This systematic tracking creates feedback loop. After 3-4 years, compare theses to outcomes. You discover patterns in what you evaluate well versus poorly. This pattern recognition improves future decisions dramatically.

What I wish I'd known: Create detailed tracking spreadsheet from investment one. Include: company name, date, amount, terms, investment thesis (2-3 paragraphs), quarterly update summaries, exit date and amount. The discipline of documentation compounds over years.

Without tracking, you're making same mistakes repeatedly without learning from them.

Community Infrastructure Is Essential

Solo angels typically make 3-5 investments over three years then stop. Isolation combined with slow feedback loops and high failure rates is demotivating. Without peer support and structured engagement, maintaining practice is extremely difficult.

Communities provide crucial infrastructure: Deal flow you couldn't source independently, educational programming compressing learning timeline, operational support handling complexity, and peer community sustaining engagement.

This isn't marketing spin. Communities genuinely determine whether most beginners sustain angel investing long enough to see outcomes or quit within 2-3 years.

What I wish I'd known: Join quality community from start, not after struggling solo for two years. The cost is worth it for infrastructure, learning, and support that make success possible.

Angel Squad demonstrates community value through 2,000+ members maintaining engagement over years, professionally curated deal flow from Hustle Fund's pipeline, systematic education, and peer support through inevitable failures.

Help Selectively, Not Universally

Early angels often try helping every portfolio company extensively. You want to prove value, demonstrate you're not just capital, and feel involved.

This overcommitment is unsustainable. With 20 portfolio companies, extensive helping means 20-40 hours monthly on top of evaluation and learning activities. You burn out.

Better approach: Be helpful where you have specific high-leverage expertise or connections. Respond promptly to requests matching your capabilities. Politely decline general requests requiring ongoing time.

What I wish I'd known: Your value is capital plus occasional targeted help, not ongoing advisory relationship. Founders appreciate responsiveness more than constant availability. Quality of help matters more than quantity.

Save energy for evaluation and portfolio building rather than exhausting yourself trying to support every company extensively.

The First Year Teaches Most

Year one feels slow because you're learning everything. How to evaluate teams. What terms mean. How to ask good questions. Everything is new and uncertain.

This discomfort is feature, not bug. The learning that happens year one through reviewing 40-60 opportunities and making 6-8 investments is foundational. You develop frameworks and pattern recognition that serve you for years.

Rushing through year one to deploy capital faster prevents this learning. Better to move slowly and learn thoroughly than move quickly and make uninformed decisions.

What I wish I'd known: Embrace slow pace year one. Review every opportunity carefully. Attend all educational programming. Document learning. The knowledge compounds more than hasty capital deployment.

Returns Come Much Later Than Expected

Beginners imagine exits happening years 3-5. Reality is years 7-10 for most meaningful exits. Early exits (years 2-4) are usually failures or modest acquisitions, not big wins.

This timeline mismatch creates disappointment. You watch portfolio for four years and nothing exciting happens. You start questioning whether this was good decision. Then year 8, first real exit occurs and you remember why you're doing this.

What I wish I'd known: Mentally prepare for 8-10 year timeline to meaningful outcomes. First 5-6 years are mostly failures and uncertainty. Don't judge success prematurely.

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

Learning to recognize them requires seeing many founders and tracking outcomes over many years.

Learning Compounds More Than Returns

After five years, knowledge about startups is more valuable than actual investment returns (which are still unrealized mostly). Understanding how startups work, what drives success and failure, and how innovation happens has professional value.

This learning enhanced my career, informed strategic thinking, and created opportunities I wouldn't have had otherwise. The financial returns might eventually be decent, but learning returns are already substantial.

What I wish I'd known: Treat angel investing as expensive but valuable education first, financial investment second. This framing makes modest financial outcomes feel appropriate rather than disappointing.

Mistakes Are Inevitable and Acceptable

You will make bad investments. You'll miss great opportunities. You'll misread teams and markets. These mistakes are part of learning, not signs of failure.

The portfolio approach is designed to survive your mistakes. No angel (including professionals) has high hit rate on individual deals. Success comes from adequate diversification and maintaining discipline despite mistakes.

What I wish I'd known: Expect to make mistakes. Don't beat yourself up over missed opportunities or failed investments. Focus on process quality and consistency. Outcomes take care of themselves if process is sound.

The Honest Summary

Everything I wish someone told me: 

• Your conviction is unreliable, maintain consistent check sizes.
• Portfolio size (20-25 minimum) matters enormously.
• Waiting years 2-5 is psychologically harder than evaluation.
• Track everything from day one for learning feedback.
• Community infrastructure is essential, not optional.
• Help portfolio companies selectively where you add value.
• First year teaches most, don't rush it.
• Returns come years 7-10, be patient.
•  Learning compounds more than financial returns. Mistakes are inevitable and acceptable parts of process.

These insights could save beginners thousands and years of frustration. They're lessons typically learned through experience but can be taught upfront if anyone bothers.

Angel Squad enables applying these lessons from start: $1,000 minimums support building 20-25 investment portfolios, curated deal flow from Hustle Fund's pipeline provides consistent opportunities, educational programming teaches proven frameworks preventing common mistakes, tracking tools facilitate systematic documentation, and active community sustains engagement through boring middle years when most quit.

Learn from others' mistakes rather than making them yourself. These insights represent expensive lessons learned over years. Apply them from first investment and you'll avoid most common pitfalls while building successful angel investing practice.