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

Most angel investing guides assume you already understand basics. First-timers need explicit step-by-step instructions for entire journey from curiosity to active investor.

The complete actionable roadmap for making your first angel investment and building proper portfolio.

Step 1: Verify You Actually Qualify (Week 1)

Before anything else, confirm you meet all requirements honestly. This prevents wasting time if fundamental barriers exist.

Check accreditation: Do you earn $200,000+ individually or $300,000+ jointly for past two years? OR is your net worth over $1,000,000 excluding primary residence? You must clearly meet one threshold. Don't proceed if qualification is borderline.

Assess risk capital: Do you have $15,000-20,000 you can lose completely without affecting lifestyle? Not "willing to risk" but genuinely expendable capital. Test: if all investments returned zero tomorrow, would your life change materially? If yes, you don't have risk capital.

Evaluate time availability: Can you commit 3-5 hours weekly for 2-3 years minimum? Look at actual calendar. Between career, family, and other obligations, where will these hours consistently come from?

Consider emotional readiness: Can you watch 60-70% of investments fail without getting discouraged? Some people compartmentalize losses well. Others find it psychologically costly.

If any requirement isn't clearly met, stop here. Address gaps before proceeding. Starting without proper foundation leads to expensive mistakes.

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."

Meeting requirements ensures you can sustain portfolio approach despite inevitable losses.

Step 2: Learn Fundamentals (Weeks 2-4)

Invest 20-30 hours learning angel investing basics before making any commitments. This prevents costly beginner mistakes.

Week 2 topics: Portfolio construction theory (why you need 15-20+ investments), power law returns (how few massive winners drive all returns), realistic failure rates (60-70% return zero), expected timeline (7-10 years minimum), and realistic returns (2-3x is success).

Week 3 topics: Investment structures (SAFEs and convertible notes), valuation mechanics (post-money caps and discounts), dilution concepts (how ownership decreases over time), and exit scenarios (acquisitions versus IPOs).

Week 4 topics: Evaluation frameworks (how to assess teams, markets, and business models), appropriate due diligence for small checks, and community operations (how SPVs work and what to expect).

Learning resources: Read Hustle Fund blog, listen to angel investing podcasts from practitioners, consume educational content from communities you're considering joining.

This foundation takes 20-30 hours total. It's most valuable time you'll invest because it prevents mistakes that cost thousands.

Step 3: Research Communities (Week 5)

Identify 5-7 angel investing communities. Evaluate systematically before choosing.

Evaluation criteria: Deal volume (10+ opportunities monthly minimum), deal quality (institutional backing and professional screening), educational structure (weekly programming from experienced investors), investment minimums ($1,000-2,000), cost transparency (clear fees and carry percentages), member satisfaction (enthusiastic recommendations).

Research process: Review each community's website and materials thoroughly. Join information sessions or webinars. Request conversations with 2-3 current members per community.

Questions for members: How much time do you actually spend weekly? What's deal flow quality really like? Is educational programming genuinely helpful? What frustrations exist? Would you recommend to friends?

Current members reveal reality beyond marketing. They'll tell you if deal volume is overstated, education is superficial, or hidden issues exist.

Create comparison spreadsheet: List communities across top. List evaluation criteria down side. Fill in details systematically. Don't choose based on marketing sophistication. Choose based on structure, member satisfaction, and fit.

Step 4: Join and Onboard (Week 6)

Select best-fit community and complete membership process thoroughly.

Membership application: Provide accreditation verification (tax returns or financial statements). Complete background information. Pay membership fees if applicable.

Onboarding thoroughly: Watch all introductory videos. Read getting started materials completely. Understand platform navigation. Learn how to review opportunities, indicate investments, and access educational content.

Schedule calendar blocks: Set recurring weekly appointments for angel investing. Tuesday evenings 7-8:30pm for education. Wednesday mornings 7-7:45am for deal review. Saturday mornings 9-10:30am for deep evaluation.

Making these fixed recurring blocks is crucial. Without protected time, engagement becomes sporadic and unsustainable.

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 onboarding phase sets foundation for that practice.

Step 5: Observe Without Investing (Weeks 7-14)

Spend 6-8 weeks observing before making first investment. This patience prevents locking up capital in your weakest decisions.

What to do: Review every opportunity presented. Read pitch decks carefully. Attend all pitch presentations (live or recorded). Follow community discussions about opportunities. Attend all educational programming. Develop initial decision frameworks.

Track your thinking: Create simple spreadsheet. For each opportunity, note whether you'd invest (yes/no) and why. Document your reasoning. This creates feedback loop for learning.

Build pattern recognition: After seeing 30-50 opportunities, patterns emerge. You notice what experienced investors focus on. You understand what separates interesting opportunities from mediocre ones.

Resist pressure to invest: Observation period feels slow. You want to get started. Resist this impatience. Your observation-phase decisions (which you're not funding) are practice for real decisions coming soon.

By week 14, you've reviewed 40-60 opportunities, attended 6-8 educational sessions, and developed informed perspective on evaluation. You're ready for first investment.

Step 6: Make First Investment (Week 15)

Choose opportunity meeting your criteria. Good enough is sufficient, don't wait for perfect deal.

Selection criteria: You understand market at basic level. Founding team seems capable based on backgrounds. Business model makes fundamental sense. Other experienced investors are participating. Terms appear standard for stage.

Execution process: Indicate $1,000 investment through platform. Review and sign documents electronically (30-60 minutes). Wire funds according to instructions within deadline. Receive confirmation that investment is complete.

Document your thesis: Before investing, write brief explanation (2-3 paragraphs) of why you're investing. What excites you? What are main risks? What does success look like? This enables learning from outcomes later.

Emotional experience: You'll feel mix of excitement and nervousness. This is normal. First investment is meaningful milestone even if amount is small.

The moment you commit capital, you transition from aspiring angel to actual angel investor with real portfolio started.

Step 7: Build Portfolio Systematically (Months 5-36)

Continue making 1-2 investments quarterly to build toward 15-20 total investments.

Quarterly rhythm: Every 12-13 weeks, plan to make 1-2 investments. This creates predictable pace sustainable alongside demanding career. Over three years, this builds 18-24 total investments.

Maintain consistency: Invest same $1,000 amount in each company regardless of excitement level. Your conviction is noisy signal that misleads as often as guides. Discipline matters more.

Continue education: Keep attending programming. Keep reviewing all opportunities even when not investing. Sustained engagement builds judgment faster than sporadic participation.

Track everything: Update spreadsheet when each investment closes. Include company name, date, amount, terms, thesis, and space for quarterly updates.

The systematic building phase is where most work happens. Three years feels long but it passes quickly. Consistency during this phase determines whether you reach proper diversification.

Step 8: Manage Portfolio (Years 4-10)

After building 15-20 investment portfolio, shift to management mode.

Quarterly reviews: Every three months, spend 90 minutes reviewing entire portfolio. Read company updates. Update tracking with progress or setbacks. Note patterns.

Selective follow-ons: When portfolio companies raise next rounds, evaluate whether to invest additional capital. Early in portfolio building, new investments for diversification matter more. Later, following on in winners makes sense.

Occasional support: Be helpful where you have specific expertise. Respond to founder requests promptly. Provide targeted help (introductions, domain insights, tactical feedback). Don't overcommit to advisory relationships.

Patience through boring years: Years 4-7 are hardest psychologically. No exits occur. Companies are building. You're waiting with uncertainty. Maintain discipline through this period.

Most angels who quit do so during years 4-6 when nothing interesting happens. Sustaining engagement separates successful long-term angels from those who abandon practice.

Common First-Timer Mistakes

Skipping observation period: Investing within first 2-3 weeks because you're excited. Your earliest decisions are weakest. Observation improves them substantially.

Varying check sizes: Investing $2,000 in companies you love and $500 in lukewarm bets. Maintain consistent $1,000 checks for first 20 investments regardless of conviction.

Moving too fast: Making 10 investments in first six months. Sustainable pace is 1-2 per quarter (6-8 annually). Speed doesn't improve outcomes.

Inadequate tracking: Not documenting theses or tracking outcomes systematically. Learning requires comparing predictions to results. Track everything from start.

Quitting prematurely: Stopping after 5-8 investments when engagement feels routine or failures accumulate. Portfolio needs 15-20 minimum for adequate diversification.

Success Indicators

You're on right track if: You're maintaining consistent 3-5 hour weekly engagement. You're making 1-2 investments quarterly. You're attending most educational programming. You're documenting and learning from decisions. You're comfortable with peripheral role in portfolio companies.

These process indicators matter more than early outcomes. You won't know investment results for years. Judge success by process quality and consistency.

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

Your systematic process for evaluating many founders increases odds of identifying great ones.

Timeline Summary

Week 1: Verify requirements Weeks 2-4: Learn fundamentals (20-30 hours) Week 5: Research communities Week 6: Join and onboard Weeks 7-14: Observe without investing Week 15: First investment Months 5-36: Build portfolio (1-2 investments quarterly to reach 15-20 total) Years 4-10: Portfolio management and patience

Total time from start to first investment: 15 weeks. Total time to proper portfolio: 2-3 years. Total time to outcomes: 7-10 years.

This timeline is realistic. It builds foundation properly, develops judgment before committing capital, constructs portfolio systematically, and maintains engagement through full lifecycle.

Angel Squad enables this step-by-step progression: clear membership requirements prevent unqualified participation, structured educational library supports systematic learning, transparent operations facilitate community evaluation, platform enables observation before investment, curated deal flow from Hustle Fund's pipeline supports consistent portfolio building, and active community sustains engagement through boring middle years.

Follow steps sequentially. Don't skip ahead. Each phase prepares you for next. The systematic approach prevents most common failures and increases odds of building successful portfolio over time.