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 people spend years thinking about angel investing without progressing toward actual participation. They're stuck between curiosity and action without clear path forward.

The systematic progression from interested observer to active investor.

Phase 1: Curiosity and Initial Research (Weeks 1-2)

You're reading about angel investing, watching startup content, and wondering if you could participate. This curiosity phase is valuable but only if it leads to honest assessment.

Questions to explore: What is angel investing actually? (buying equity in very early-stage companies before institutional capital) How does it work operationally? (through communities using SPV structures typically) What returns are realistic? (2-3x over 10 years for successful portfolios) What risks exist? (60-70% of investments return zero)

Resources for exploration: Read content from actual practitioners like Hustle Fund's blog, not motivational content from people selling courses. Listen to podcasts where experienced angels discuss reality honestly. Join online communities where angels discuss their experiences.

Red flags to watch for: Content promising quick returns or high success rates, courses selling "secrets" to angel investing success, anyone downplaying failure rates or timeline requirements, and unrealistic success stories without acknowledging losses.

Goal for this phase: Develop basic understanding of what angel investing involves, realistic expectations about outcomes, and honest sense of whether this interests you beyond surface-level curiosity.

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." Understanding this harsh reality upfront determines whether curiosity proceeds to action.

Phase 2: Requirements Assessment (Week 3)

Before going further, honestly verify whether you meet all requirements. This prevents wasting time if fundamental barriers exist.

Legal requirement: Do you meet accredited investor status? Check income ($200,000 individually or $300,000 jointly for past two years) OR net worth ($1,000,000 excluding primary residence). If no, stop here and focus on reaching accreditation over next 2-4 years.

Capital requirement: Do you have $15,000-20,000 over next 2-3 years that you can lose completely without affecting lifestyle? Not money you're "willing to risk" but money whose total loss wouldn't matter. If stretching to find this capital, you don't have it.

Time requirement: Can you commit 3-5 hours weekly for 2-3 years minimum? Be honest about calendar alongside career, family, and other priorities. Sporadic engagement doesn't work.

Emotional requirement: Can you watch 60-70% of investments fail without getting discouraged or personalizing outcomes? Some people can't tolerate this psychologically regardless of financial capacity.

Decision point: If you meet all requirements clearly, proceed to next phase. If any requirement is borderline or missing, address gaps before continuing. Starting without proper foundation leads to expensive mistakes.

Phase 3: Systematic Learning (Weeks 4-6)

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

Core concepts: Portfolio construction theory (why 15-20+ investments minimum), power law returns (how few massive winners drive all returns), realistic failure rates (60-70% return zero), timeline expectations (7-10 years to meaningful exits), and realistic returns (2-3x over decade is good outcome).

Practical knowledge: How SAFEs and convertible notes work, what valuation caps and discounts mean, how cap tables function, what dilution means, and how exits actually happen (acquisitions versus IPOs).

Evaluation frameworks: How to assess founding teams at early stages, how to think about market sizing, what product-market fit signals look like, and what due diligence is appropriate for small checks.

Learning resources: Read blogs from experienced angels and VCs (Hustle Fund, First Round, a16z). Listen to podcasts featuring actual investors discussing real experiences. Join Angel Squad or similar community and consume educational materials before investing.

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." But you need baseline knowledge before starting that practice.

Phase 4: Community Selection (Weeks 7-8)

Research 5-7 angel investing communities systematically. This decision determines whether you sustain practice or quit within years.

Evaluation criteria: Deal volume (10+ opportunities reviewed monthly), 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), and member satisfaction (enthusiastic recommendations from current members).

Research process: Review each community's website and materials. Request conversations with 2-3 current members per community. Ask specific questions about time commitment, deal quality, education value, frustrations, and whether they'd recommend to others.

Comparison methodology: Create spreadsheet comparing communities on key factors. Don't choose based on marketing sophistication. Choose based on structure, member satisfaction, and alignment with your situation.

Decision and commitment: Select best-fit community and join. Complete onboarding thoroughly. Schedule recurring calendar blocks for angel investing activities (education sessions, deal review, decision-making time).

Phase 5: Observation Without Investment (Weeks 9-16)

Join community but don't invest yet. Spend 6-8 weeks observing, learning, and building frameworks before committing capital.

What to do: Review every opportunity presented. Read pitch decks carefully. Attend or watch all pitch presentations. Follow community discussions about opportunities. Attend all educational programming. Develop initial decision criteria and evaluation frameworks.

Why observation matters: Your first investments made before developing judgment are typically worst decisions. By observing first, you avoid locking up real capital in your weakest decisions. Your first actual investment will be more thoughtful.

Pattern recognition development: After seeing 30-50 opportunities, patterns emerge. You notice what experienced investors focus on. You understand what separates interesting opportunities from mediocre ones. You develop confidence in your evaluation approach.

Building conviction: Before investing, you need confidence that your process makes sense. Observation period builds that confidence. You've seen enough to make informed decisions rather than guessing.

Common mistake to avoid: Getting impatient and investing after 2-3 weeks. The observation period feels slow but it's crucial preparation. Resist pressure to invest before you're ready.

Phase 6: First Investment (Week 17)

Make first investment when you find opportunity meeting your criteria. This is significant milestone transitioning from observer to participant.

Selection criteria for first investment: You understand market at basic level. You believe founding team is capable based on backgrounds and presentation. Business model makes fundamental sense. Other experienced investors are participating. Terms are standard. You feel comfortable with evaluation.

Don't wait for perfect opportunity. Good enough is sufficient for first investment. You're learning, not trying to pick unicorn.

Execution process: Indicate investment amount through platform (typically $1,000). Sign documents electronically. Wire funds according to instructions. Receive confirmation. Update tracking spreadsheet with investment details.

Document your thesis: Before investing, write down why you're investing. What excites you about opportunity? What are main risks? What does success look like? This documentation enables learning from outcomes later.

Psychological shift: After first investment, you're no longer aspiring angel investor. You're active angel investor with real portfolio started. This mental shift matters more than financial amount involved.

Phase 7: Systematic Portfolio Building (Months 5-36)

Continue making 1-2 investments quarterly to systematically build portfolio to 15-20 investments over 2-3 years.

Quarterly rhythm: Each quarter (every 12-13 weeks), plan to make 1-2 investments. This creates predictable pace that's sustainable alongside career and other priorities.

Maintaining consistency: Invest same amount ($1,000) in each company regardless of excitement level. Your conviction is noisy signal. Discipline matters more than feeling confident about specific opportunities.

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

Portfolio company engagement: Be occasionally helpful where you have specific expertise to share. Respond to requests promptly. Don't overcommit to advisory relationships requiring ongoing time.

Tracking and reflection: Maintain detailed records. Review quarterly to see patterns in what you evaluate well versus poorly. Adjust future investments based on learning.

Phase 8: Patience and Portfolio Management (Years 4-10)

After building 15-20 investment portfolio, most work is patience and occasional portfolio management.

The boring middle: Years 2-5 are hardest psychologically. Companies are building but no exits happen. You're waiting with limited information about which investments will succeed. Maintaining engagement through this boring period separates successful angels from those who quit.

Quarterly reviews: Every 3 months, review entire portfolio. Update tracking. Note progress and setbacks. Look for patterns. Make occasional follow-on decisions when companies raise next rounds.

Sustained community participation: Continue attending some educational programming. Stay connected to other investors. Maintain engagement even when nothing exciting is happening.

Why long-term commitment matters: Most exits happen years 7-10. Quitting during years 3-5 because nothing is happening means you never see outcomes from years of work.

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 sustained engagement over years, not intense short-term focus.

Common Pitfalls at Each Phase

Phase 1-2: Staying stuck in curiosity without honest requirements assessment. Spending months reading without making decision to proceed or acknowledge you don't qualify.

Phase 3: Skipping systematic learning and jumping straight to investing. This causes preventable mistakes that structured education would avoid.

Phase 4: Rushing community selection and joining first option found. Wrong community choice means either quitting or switching later (both have costs).

Phase 5: Skipping observation period or making it too short (2-3 weeks). Your earliest investment decisions are weakest. Observation improves them substantially.

Phase 6: Waiting for perfect first investment instead of choosing good enough opportunity. Perfectionism prevents progress.

Phase 7: Varying check sizes based on conviction, moving too fast, or concentrating investments. Discipline determines outcomes more than individual deal selection.

Phase 8: Quitting during boring middle years (3-5) when nothing interesting happens. This abandonment means you never see outcomes you worked years toward.

Timeline Summary

Weeks 1-2: Curiosity and initial research Week 3: Requirements assessment Weeks 4-6: Systematic learning (20-30 hours) Weeks 7-8: Community research and selection Weeks 9-16: Observation without investment Week 17: First investment Months 5-36: Portfolio building (1-2 investments quarterly to reach 15-20 total) Years 4-10: Portfolio management and patience until exits

Total time from curiosity to first investment: 4-5 months. Total time to proper portfolio: 2-3 years. Total time to outcomes: 7-10 years.

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

Angel Squad enables this progression through: 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 supports consistent portfolio building, and active long-term community sustains engagement through boring middle years. The infrastructure provides clear path from curiosity to successful angel investing practice.

The journey from curious to closing deals takes months for first investment and years for proper portfolio. Most people underestimate timeline and either rush or never start. Understanding realistic progression enables making informed decision about whether to pursue seriously or acknowledge it's not right fit for your situation.