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.

Justin Kan has built one of the most interesting investment portfolios in Silicon Valley. Most people know him as the guy who live-streamed his entire life on Justin.tv, or as the co-founder of Twitch, which Amazon bought for nearly $1 billion. But his approach to investing tells a different story about what actually works at the early stage.

I've spent time analyzing Justin Kan investments to understand his pattern recognition. And here's what stands out: he doesn't invest like a typical ex-founder turned angel. There's a method here that every early-stage investor should pay attention to.

Who Is Justin Kan, Really?

Before we get into his investment approach, let's establish the basics. Justin co-founded Justin.tv in 2007, which eventually spawned Twitch. After selling Twitch to Amazon in 2014, he went on to co-found Atrium (a legal tech startup that shut down in 2020) and later launched the NFT marketplace Fractal.

But what makes Justin interesting as an investor isn't his founder resume. It's that he's lived through both massive successes and public failures. That experience shows up in how he evaluates deals.

Justin started angel investing seriously around 2014. Since then, he's backed companies like Cruise, Zenefits, Rippling, Retool, and dozens of others. Some worked out incredibly well. Others didn't. But there's a clear thesis running through his portfolio.

What's Justin's Investment Philosophy?

Justin has been pretty open about his approach on Twitter and his blog. He focuses on a few key areas:

1. Developer tools and infrastructure: Justin understands that the best businesses often serve other businesses. His investments in companies like Retool, Segment, and Rainforest QA show a consistent bet on tools that make developers more productive.

2. Future of work: Given his experience building remote-first companies, Justin gravitates toward startups rethinking how people work. Rippling, Gusto, and other HR tech investments fit this pattern.

3. Consumer products with network effects: Even though he's known for B2B, Justin hasn't abandoned consumer. But notice a pattern in his consumer bets like Cruise and Bird: they're marketplace or network effect businesses, not just viral apps.

Here's what I find most interesting about Justin Kan investments. He's not just investing in themes. He's investing in specific types of founders at specific stages.

How Does Justin Evaluate Founders?

I've noticed three clear patterns in Justin's deal evaluation:

He backs technical founders solving their own problems: Look at Retool. The founder, David Hsu, was a software engineer who got tired of building internal tools. Same with Segment. The founders were dealing with analytics integration headaches firsthand.

This matters because technical founders who've lived the problem tend to build better initial products. They're not guessing at what customers want.

He values execution speed over perfect planning: Justin has said publicly that he looks for founders who ship fast and iterate based on real feedback. Not founders who spend months planning the perfect product launch.

This makes sense given his own background. Justin.tv wasn't a carefully planned business. It was an experiment that evolved based on what worked.

He's willing to back founders on their second or third attempt: Unlike some investors who fetishize "first-time founders," Justin understands that failure teaches lessons. He backed Parker Conrad at Rippling even after the Zenefits regulatory issues.

What Can We Learn From Specific Justin Kan Investments?

Let's break down some actual deals:

Cruise (acquired by GM for over $1 billion): Justin invested early in Cruise when autonomous vehicles were still seen as science fiction by most investors. But he saw technical founders (Kyle Vogt had sold his previous startup to Twitch) attacking a massive market with a differentiated approach.

The lesson? Sometimes the "crazy" ideas from proven founders are worth backing. Especially in markets where technology is finally catching up to the vision.

Rippling: This investment shows Justin's willingness to back founders going through tough times. Parker Conrad had been forced out of Zenefits amid regulatory problems. Most investors would have passed.

But Justin saw that Parker understood the problem space deeply and had learned from his mistakes. Rippling is now valued at over $11 billion.

The lesson? Past failures don't predict future failures. Sometimes they're the best education a founder can get.

Retool: This is classic Justin. A technical founder building developer tools for a problem he personally experienced. The product practically sold itself because developers immediately understood the value.

The lesson? Products that solve painful problems for technical users can grow through word of mouth. You don't always need massive marketing budgets.

What About Justin's Misses?

Not every Justin Kan investment worked out. And studying the failures is just as instructive as celebrating the wins.

Exec: This was an on-demand assistant service that shut down. Justin was an early investor and advisor. The problem? Unit economics never worked. Turns out paying humans to do tasks isn't a great business model unless you can charge premium prices.

Atrium: Justin's own legal tech startup shut down in 2020 after raising $75 million. The vision was right, automating legal work for startups, but the execution didn't work. Markets weren't ready, or the product wasn't right, or both.

The lesson from these failures? Even great founders with strong theses can't force market timing. Sometimes the market just isn't ready for what you're building.

What Makes Justin Different From Other Angel Investors?

Here's what sets Justin apart from typical angel investors:

1. He's genuinely helpful to founders: Justin doesn't just write checks. He helps founders think through product strategy, hiring, and fundraising. His Twitter DMs are apparently open to founders seeking advice.

2. He invests in people, not just ideas: Justin has said he'll back founders he believes in even if he's not sold on the initial idea. Because he knows ideas change but founders don't.

3. He's not afraid to double down: When his portfolio companies raise follow-on rounds, Justin often invests more. This shows conviction and helps maintain ownership as companies grow.

How Should Early-Stage Investors Apply Justin's Approach?

Here are the tactical takeaways for angel investors:

Focus on founders solving problems they've personally experienced: You don't need to understand every market. But you should be able to verify that the founder deeply understands their customer's pain.

Look for technical teams that can move fast: In early-stage investing, execution speed matters more than perfect strategy. Teams that ship quickly and learn from users will beat teams that plan forever.

Don't be scared of founder "baggage": Previous failures or controversies don't automatically disqualify founders. Sometimes they're signs that someone has learned expensive lessons on someone else's dime.

Build real relationships with founders: The best deal flow comes from founders you've helped in the past. Justin's reputation for being genuinely helpful has probably unlocked deal access that money alone couldn't buy.

Invest in tools and infrastructure: Developer tools, data infrastructure, and productivity software may not be sexy. But they're often better businesses than consumer apps. They have clearer monetization paths and more predictable growth.

The Bottom Line on Justin Kan's Investment Strategy

Justin's success as an investor comes from pattern recognition earned through building companies. He knows what early traction looks like. He knows which founder qualities actually predict success. And he knows that the best investments often look slightly crazy at first.

For early-stage investors, that's the real lesson. Don't just copy Justin's portfolio themes. Study how he evaluates founders and thinks about markets. That's the stuff you can actually apply to your own deal evaluation. 

If you're looking to connect with other investors who take this hands-on, founder-first approach, Angel Squad brings together operators-turned-angels who are serious about helping the companies they back actually succeed, not just collecting logos for their portfolio pages.

The venture capital industry loves talking about pattern recognition. But Justin Kan investments show what that actually looks like in practice. It's not about surface-level metrics. It's about understanding what separates founders who execute from founders who just talk.

And that's something every investor should be thinking about.