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

You invest in a logistics startup. Six months later, a friend introduces you to another logistics company that's better. Do you invest?

You're an advisor to a SaaS company and they tell you their churn metrics are terrible. Then another SaaS company in the same space asks you to angel invest. Do you share what you know?

You're on the board of one company and deeply involved in their Series A fundraising. Your other portfolio company is also raising. Both are pitching the same VCs. Do you prioritize one over the other?

These situations happen constantly in angel investing. The question isn't whether you'll face conflicts. It's whether you'll handle them well or blow up relationships in the process.

The Portfolio Competition Problem

Let's start with the most common conflict: investing in competing companies.

Elizabeth Yin from Hustle Fund wrote about this exact issue after trying to raise for her own startup. She found that VCs who had invested in similar companies were overindexed on that sector and didn't want more portfolio competition. She thought it was an excuse. Then she became an investor.

"Say I have three companies in the same space," she explains. "It's hard enough to coordinate to make sure they're not direct competition, even if not now, then down the road. Adding one more company to this scenario is tough."

The math is straightforward. If you have limited capital, limited time, and limited network access to provide to companies, you can't support 10 companies all fighting for the same customers. It's like coaching a basketball team with four point guards. Even if you love point guards, you don't need a fifth.

But where things get nuanced is one company in a sector can be fine. Even two or three if they're serving different segments or geographies. The problem is when you're overindexed, and founders start worrying that you're sharing their insights with competitors or prioritizing intros for other companies.

The rule that works is to disclose early and often. If a founder asks you to invest and you already have a company in their space, tell them upfront. Let them decide if they're comfortable. Some founders won't care. Others will pass. That's their choice to make, not yours.

The Information Asymmetry Challenge

You're an angel investor in five SaaS companies. One tells you their AWS costs are crushing margins and they're exploring switching to Google Cloud. Another mentions they're about to sign an AWS enterprise deal that will reduce costs by 60%. Do you tell the first company about the second company's AWS insights?

This is where angel investing gets legally and ethically complicated.

You owe fiduciary duties to the companies where you're a board member or formal advisor. But even as a passive angel, you have information advantages that create uncomfortable dynamics. You know which companies are growing, which are struggling, which are raising, and which are cutting burn. You're in investor update emails. You hear about pivots before they're public.

Using that information to benefit one company can hurt another. Sharing it too freely violates trust. Not sharing it means withholding potentially valuable insights.

There's no perfect answer, but here's the framework that works: share general insights without revealing company-specific information. If you learned about AWS cost savings from one company, you can encourage others to negotiate better rates without disclosing your source. But don't share specifics like pricing tiers or negotiation strategies that could be traced back.

Eric Bahn at Hustle Fund talks about how being an angel means you're not in the driver's seat. You're not building the company. Founders make the decisions. Your job is to support them, not to play God by controlling information flow across your portfolio.

The Dual Role Dilemma

Lots of angels also work as advisors, consultants, or part-time operators for startups. This creates obvious conflicts.

You're advising a company on go-to-market strategy and they share their entire customer acquisition playbook. Then you invest in a competitor. Can you advise the second company using insights from the first? Legally, probably not. Ethically, definitely not. Practically, it's hard to unsee what you've seen.

The solution is clean separation. If you're an advisor to Company A, don't invest in anyone who competes directly with them unless you end your advisory relationship first. If you're an investor in Company B, don't take on advisory work with their competitors unless both companies explicitly consent.

And always, always disclose. Shiyan Koh from Hustle Fund emphasizes this: your word in business needs to mean something. If you tell a founder you'll help them, you can't simultaneously be helping their competitor. It's one of the fastest ways to destroy your reputation.

The Intro and Network Conflict

Here's a conflict that doesn't get discussed enough: whose fundraising do you prioritize?

You have two portfolio companies both raising at the same time. Both ask you to intro them to the same VC. You can't send both at once without looking ridiculous. Do you send the better company? The one who asked first? The one you invested more in?

What you can't do is ghost one of them. And you can't promise intros you won't deliver. Both of those moves burn trust forever.

The best approach is honesty. "I've got another company in my portfolio also raising right now, and I think you're both strong fits for this VC. I'm going to intro both of you, but I wanted you to know the context. I believe in both companies, and I think the VC would too."

Most VCs understand this. They know angels have portfolios. What annoys them is when you overhype a mediocre company or hide the fact that you're pushing multiple deals to them at once.

At Hustle Fund, Elizabeth Yin talks about how they've had to navigate this hundreds of times. The answer is always transparency. Tell the founders what you're doing. Tell the VCs who else you're sending. Let everyone make informed decisions.

When You Should Recuse Yourself

Some conflicts can't be managed. They need to be avoided entirely.

If you're on the board of Company A and they're negotiating to acquire Company B, and you're an investor in Company B, you need to recuse yourself from board discussions. You can't represent both sides of a transaction.

If you have inside knowledge of a company's struggles, a founder death, embezzlement, or anything material that hasn't been disclosed, you can't invest in their competitors without telling your existing portfolio company you're stepping back.

And if a founder asks you point-blank whether you'll prioritize their company over others in your portfolio, you better give an honest answer. Telling them yes and then doing the opposite is fraud, not just bad angel investing.

Hustle Fund has invested in nearly 400 companies. Elizabeth Yin has written about how sometimes her founders face co-founder breakups, visa issues, health problems, and embezzlement. In those situations, managing conflicts means being clear about what you can and can't do. Sometimes that means stepping back from a company entirely.

Building Systems to Prevent Conflicts

Smart angels build systems to avoid conflicts before they become problems.

Keep a spreadsheet of every company you've invested in, their sector, their stage, and any special roles you have like board seats or advisory positions. Before you invest in a new company, check the spreadsheet. If there's overlap, pause and think it through.

Set rules for yourself. Maybe you decide you'll never invest in more than two companies in the same narrow space. Maybe you decide you'll never take a board seat in competing companies. Maybe you decide you'll always disclose potential conflicts in writing before investing.

Document your disclosures. When you tell a founder about a potential conflict, send a follow-up email summarizing the conversation. That protects both of you.

And build a reputation for transparency. Founders talk to each other. If you're known as someone who discloses conflicts, honors commitments, and doesn't play games, you'll have more deal flow than you can handle. If you're known as someone who hides conflicts or prioritizes some founders over others without being upfront, your reputation will tank.

The Long Game

Angel investing is a long-term game built on relationships. Conflicts will happen. How you handle them defines whether you succeed as an investor.

The temptation is to maximize every opportunity. Invest in all the good companies. Make all the intros. Be everything to everyone. But that's how you end up in impossible situations where you've promised three founders the same intro, or you're on two boards negotiating against each other, or you have information you can't use.

Better to pass on some deals, be honest about limitations, and build a portfolio you can support without conflicts exploding in your face. At the end of the day, your reputation is the only thing you can't buy back.

If you're navigating these conflicts and want to learn from other angels who've been through it, Angel Squad is built around exactly these kinds of real-world dilemmas. It's investors who are figuring this out in real time and sharing what works without sugarcoating the messy parts.