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

The idea of starting your own angel investing group sounds attractive. You control deal flow. You set the culture. You build something from scratch.

But the reality of running an investing group is far more complex than most people realize.

When does starting your own make sense? When should you just join something existing?

The True Cost of Starting a Group

Most people dramatically underestimate what's involved in running an angel investing group. It's not just organizing meetings and sharing deals.

Legal structure and compliance is the first massive hurdle. Are you operating as a fund? A syndicate? An informal group? Each has different regulatory requirements, tax implications, and liability considerations.

You likely need legal counsel. Formation documents. Operating agreements. Investment vehicle structures (SPVs, rolling funds, etc.). This is easily $10,000-25,000 in legal fees before you even evaluate your first company.

Then there's ongoing administration. Someone has to source deal flow. Screen companies. Organize investment documentation. Manage cap tables. Handle tax reporting. Coordinate with founders.

If you're doing this properly, it's a part-time job. Expect 10-15 hours weekly minimum.

As Elizabeth Yin, co-founder and GP of Hustle Fund, explains: "Getting deal flow & education have been the bigger blockers to date" for new investors. Starting a group means you're now responsible for solving these problems for others, not just yourself.

Why People Want to Start Groups

Before evaluating if you should start a group, understand why you want to.

Common motivations:

Control: You want to decide what deals members see and how the group operates.

Community building: You enjoy bringing people together and creating something new.

Deal flow access: You think running a group will give you better deal flow.

Learning opportunity: You want to learn by doing, even if it's difficult.

Geographic need: Nothing exists in your area serving your community.

Specialization: You want to focus on a specific industry or stage that existing groups don't cover.

Some of these are good reasons. Others are based on misconceptions about how deal flow and group dynamics actually work.

When Joining Makes More Sense

You're new to angel investing: If you haven't made 10+ investments yourself, you don't have the pattern recognition to screen deals for others effectively. Join a group to learn first.

You have limited time: Running a group requires consistent 10-15 hour weekly commitment. If you can't sustain that, join instead.

You want to focus on investing: If you'd rather spend time evaluating opportunities than managing infrastructure, join an existing group.

Good options exist: If established communities serve your needs, why recreate infrastructure that exists?

Angel Squad, for example, provides curated deal flow from Hustle Fund's pipeline of 1,000+ monthly applications, educational programming from experienced VCs, and community of 2,000+ investors. All infrastructure is handled so you focus on learning and investing.

You lack capital: Starting a group typically requires personal investment in infrastructure ($10,000-25,000+) before generating any returns.

You're outside major hubs: Virtual-first national groups provide better deal flow than local groups in smaller markets.

When Starting Might Make Sense

You have specific specialization: If you want to focus exclusively on, say, climate tech in Southeast Asia, and no group serves this niche, starting your own could work.

You have strong existing network: If you already have 20-30 potential members and consistent founder relationships for deal flow, you have critical mass.

You're willing to commit 2-3 years: Building a group takes years. If you're not committed long-term, don't start.

You have operational experience: Former founders or operators who've built organizations understand what's required. First-time builders often underestimate complexity.

You have capital for infrastructure: You can invest $25,000-50,000 in legal, operational, and administrative setup before seeing returns.

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." Starting a group delays your own portfolio building by 1-2 years minimum.

The Middle Path: Starting Small

Don't need to launch a formal group immediately. Consider starting with informal monthly meetings.

Gather 5-10 interested investors. Meet monthly to discuss companies you've all independently evaluated. Share insights and due diligence. Co-invest occasionally.

This tests whether you enjoy organizing, whether others consistently show up, and whether you can sustain effort required.

After 6-12 months, if it's working, consider formalizing structure. If not, you haven't invested significant capital in failed experiment.

Critical Questions Framework

On deal flow: Can you realistically source 20+ quality opportunities monthly? Do you have founder networks that will share deals with you? Can you compete with established funds for access?

On operations: Can you commit 10-15 hours weekly for 2-3 years? Can you afford $25,000-50,000 in setup and operations? Do you have experience managing organizations?

On value proposition: Why would investors join your group versus established alternatives? What unique value do you provide? Is your specialization actually underserved?

On member commitment: Do you have 20+ people committed to joining? Will they actually participate or just be passive? Do they have capital to deploy?

On expertise: Have you made 15+ angel investments yourself? Do you understand due diligence, terms, and portfolio construction? Can you teach others?

If you answered "no" to most of these, joining makes more sense than starting.

The Realistic Timeline

If you decide to start anyway, understand the timeline:

Months 1-3: Legal structure, formation documents, initial fundraising.

Months 4-6: Building deal flow pipeline, establishing screening process.

Months 7-12: First investments, learning operations, fixing initial mistakes.

Year 2: Refining process, growing membership, building track record.

Year 3: Established operations, consistent deal flow, actual portfolio outcomes.

Most people give up in months 4-6 when operational reality hits. The work is much harder than anticipated. Deal flow is harder to source. Members are less engaged than promised.

Joining vs. Starting: The Decision Matrix

Join existing group if:

• You're new to angel investing (under 10 investments)
• You want to focus on learning and portfolio building
• You have limited time (under 10 hours weekly available)
• Good alternatives exist serving your needs
• You lack $25,000+ for infrastructure investment

Consider starting if:

• You've made 15+ angel investments with track record
• You can commit 10-15 hours weekly for 2-3 years minimum
• You have genuine specialization no group serves
• You have 20+ committed members and deal flow network
• You have capital for infrastructure and operational losses

Try informal first if:

• You're unsure about commitment required
• You want to test concept before formal investment
• You have 5-10 interested people but not 20+
• You're not ready for legal/operational complexity

The Honest Answer

For 95% of people considering starting an angel investing group, joining an established community makes more sense.

The time, capital, and expertise required to build something excellent is far higher than most people expect. The opportunity cost of 2-3 years focused on infrastructure instead of portfolio building is significant.

As Shiyan Koh, co-founder and GP of Hustle Fund, notes: "Great founders can look like anyone and come from anywhere." Your goal is finding and investing in those founders, not building organizational infrastructure.

Angel Squad provides the infrastructure most investors need: curated pre-seed/seed deal flow from Hustle Fund's professional pipeline, weekly educational programming from experienced VCs and successful founders, community of 2,000+ investors across 40+ countries, transparent cost structure with $1,000 investment minimums, and administrative handling of SPVs, cap tables, and tax documentation. 

All infrastructure is managed so members focus exclusively on evaluation, learning, and portfolio building. For investors serious about developing expertise and building portfolios, this lets you start immediately rather than spending 1-2 years building infrastructure.

Join first. Learn how excellent groups operate. Make 15-20 investments. Build track record and network. Then, if you still want to start something specialized, you'll have credibility and expertise to succeed.

Don't let the appeal of building something distract from the actual goal: becoming a successful angel investor.

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