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

An angel investor is someone with accredited investor status who puts their own money into startups. The technical definition matters less than what it means in practice.

To be accredited, you need a million dollars in investable assets or a salary over $200k annually. That's the SEC's line. But here's what people miss: your dentist could be an angel investor. So could your friend's mom. You don't need to be a tech expert or former founder. You just need to meet the financial threshold and be willing to take risk.

Speed Is the Superpower

The most important distinction: angels invest their own money. They don't have LPs to answer to. No investment committees. No office politics. As Hustle Fund's materials point out, angels can write you a check after one meeting if they like you and your idea. That speed matters when you're trying to close a round quickly.

The Case for Small Checks

Check sizes typically range from $1k to $25k, though some angels go higher. The lower end surprises people. Elizabeth Yin, co-founder and General Partner at Hustle Fund, wrote extensively about how $1k checks became common.

She noticed friends writing small checks not because they lacked wealth, but because they lacked liquidity. They were founders themselves with equity but limited cash. Founders still wanted them because they brought operational experience and connections.

The small check strategy creates interesting dynamics. If you're raising $1 million and only take angel checks, you need to close many deals. That's a lot of conversations. But those angels often become your champions. They make introductions. They put their reputation on the line when recommending you to their network. Small checks lead to bigger checks.

What Angels Bring Beyond Capital

What angels bring beyond capital varies widely. Many are experienced operators. If you need help building a marketing team or creating a product roadmap, an angel with relevant background becomes valuable. But not all angels want to be hands-on. Some just write the check and get out of the way. You should figure out which type you're talking to.

Angels face limits that VCs don't. They typically can't participate in later rounds when check sizes get bigger and valuations climb. They might not have enough capital to follow on. This creates a natural ceiling on their involvement as your company scales.

How VCs Operate Differently

Venture capitalists work differently. They raise funds from Limited Partners, then deploy that capital into startups. When exits happen, returns get divided among the LPs and the VC firm. This structure lets VCs write bigger checks, from $50k to millions. It also means they can participate across multiple rounds as companies grow.

The LP relationship shapes everything VCs do. They're stewards of other people's money. That creates obligations. They need to believe each investment can return 100x to justify the risk to their LPs. Angels don't face that pressure. Eric Bahn, co-founder and General Partner at Hustle Fund, angel invests outside Hustle Fund in businesses he'd never back through the fund. Restaurants. Local businesses. Non-software companies. His question as an angel: will this lose my money? A 3x return would be fine. A 10x would be great.

For a VC, 3x barely moves the needle. The portfolio construction math demands home runs. Hustle Fund invests in pre-seed companies across 600+ portfolio companies. They need several massive outcomes to return their fund. Angels need smaller wins to do well.

The Accredited Investor Rule

The accredited investor rule exists to protect people. The theory goes that if you have significant assets or high income, you can afford to lose the money you put into high-risk investments. Whether that makes sense is debatable. It definitely limits who can participate in early-stage investing.

Some creative paths exist around this. If you're a founder who raised at $5 million and own 30 percent of your company, you're worth $1.5 million on paper. You're accredited even if you have no cash. Elizabeth mentions this as one reason founder-operators became common angel investors.

Why Founders Choose Angels

Why do founders take angel money when VCs offer bigger checks? Speed. Relationships. Specific expertise. Angels can move in days. VCs take weeks or months. Angels might know your industry deeply. They might open specific doors you need opened right now.

The best angels think long-term. They help find early customers. They make key introductions. They give feedback when asked but don't micromanage. They understand most startups face serious struggles and stay supportive through the downs.

At its core, angel investing means betting personal capital on people and ideas you believe in. No institutional constraints. No mandate to deploy a certain amount in a certain timeframe. Just you, your judgment, and your willingness to take risk on something that might not exist in two years.

That freedom comes with responsibility. Angels can make bad decisions and only hurt themselves. But they can also back founders who VCs overlook. They can take chances on unconventional ideas. They can be first money in when no one else will. That matters more than most people realize.