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

I've watched hundreds of first-time angel investors make their first checks. Some absolutely nail it. Most don't.

The difference isn't intelligence or wealth. It's context. The investors who succeed have a support system helping them avoid predictable mistakes. The ones who struggle are making decisions in isolation, convinced they can figure it out alone.

Let me show you why that rarely works.

The Brutal Math of Solo Angel Investing

Here's what most people don't tell you about angel investing: the failure rate for first-time angels is catastrophic.

Research from Robert Wiltbank shows that inexperienced angel investors see negative returns on average. Not "barely break even." Negative. You'd literally do better putting your money in index funds.

The reason is simple. Early-stage investing requires pattern recognition that only comes from seeing hundreds of deals. First-time investors see maybe 5-10 opportunities per year. They lack the reference points to distinguish between companies that look similar but have wildly different odds of success.

Think about it. How do you evaluate a pre-seed SaaS company if you've never seen a dozen other pre-seed SaaS companies? You can't spot the red flags because you don't know what normal looks like. You can't recognize exceptional founders because you haven't met enough founders to calibrate your judgment.

This isn't theoretical. I've watched first-time investors get excited about companies because the founder was charismatic or the market size was huge. Both are irrelevant if the business model doesn't work or the team can't execute. But you only learn that by seeing 50 companies try and fail with the same approach.

What Changes in a Community Setting

Angel investing communities compress the learning curve dramatically. Instead of evaluating 10 deals per year solo, you're exposed to 50-100 deals annually and hearing smart people debate the merits of each one.

At Angel Squad's weekly events, members see pre-seed and seed companies pitch. But more importantly, they hear Hustle Fund GPs and experienced investors explain what they're looking for. When Eric Bahn says "the retention numbers don't make sense," you learn what good retention looks like. When Elizabeth Yin says "I want to see them demonstrate customer understanding," you internalize what that actually means in practice.

The data on communal learning is compelling. A Stanford study found that investors who participated in structured angel groups had portfolio returns 2.5x higher than solo angels. That's not a small edge. That's the difference between losing money and building meaningful wealth.

The Specific Advantages That Matter

Let me break down exactly what communities provide that you can't replicate on your own.

Pattern recognition at scale. You need to see hundreds of pitches to develop judgment. Communities give you that exposure in months instead of decades. When you've watched 100 founders answer "why now?" you can instantly spot the ones who've actually thought it through versus those who are hand-waving.

Real-time feedback on your thinking. The most valuable thing about communities isn't the deals. It's having people tell you when your reasoning is flawed. At Angel Squad, members write investment memos and share them with peers. Getting feedback like "you're overweighting market size and ignoring execution risk" is worth thousands of dollars in saved capital.

Access to domain experts. No one person can be an expert in every industry. But in a community of 2,000+ investors, someone has deep experience in whatever sector you're evaluating. Angel Squad has members who've spent decades in climate tech, fintech, biotech, and every other vertical. When you're looking at a deal, you can tap into that expertise.

Accountability for your decisions. It's easy to make emotional investments when no one's watching. It's much harder when you have to defend your thesis to smart people. Communities force discipline. You can't just invest because you "liked the founder." You need coherent reasoning.

The Financial Impact Is Real

Let's talk numbers. The average first-time angel investor deploys $25K-$50K into 5-10 companies over their first 2-3 years. Without community support, 7-9 of those investments will return zero. Maybe one or two will return something meaningful.

The math changes dramatically in a community. You're still going to have failures—that's venture. But you'll avoid the catastrophically bad investments that result from inexperience. You'll also get access to better deal flow because communities like Angel Squad have relationships with quality funds and can source opportunities you'd never see solo.

Here's a real example. A first-time investor in Angel Squad evaluated a fintech startup that looked compelling: big market, experienced founder, traction. In isolation, she would have invested. But in a community discussion, someone with 10 years in payments pointed out that the regulatory risk was massive and the company hadn't addressed it. She passed. Six months later, the company shut down due to compliance issues.

That saved $10K is worth more than any theoretical return. Avoiding disasters is how you build a winning portfolio.

But Community Isn't a Magic Bullet

Joining a community doesn't guarantee success. You can still make terrible investments. You can still ignore advice. You can still let FOMO override your judgment.

The investors who do well in communities are the ones who actively participate. They show up to events, ask questions, write memos, and engage in debates. They treat it like a graduate program in startup investing, not a Netflix subscription.

Angel Squad's Venture Fellows Program explicitly recognizes this. Members who want to get serious about investing join quarterly cohorts where they work directly with Hustle Fund on deal pipeline and pitch calls. That hands-on experience matters more than any amount of passive learning.

The Counterargument: Can't You Learn on Your Own?

Some people argue that you can build pattern recognition solo by reading books, listening to podcasts, and making small investments.

Technically, yes. But it takes 5-10 years instead of 1-2 years. And you'll lose a lot more money along the way.

The problem with self-taught investing is that you don't know what you don't know. Books can teach you frameworks, but they can't give you real-time feedback on your specific decisions. Podcasts can expose you to investor thinking, but they can't answer your questions about the deal you're evaluating right now.

Community fills those gaps. It's the difference between reading about how to swim and actually getting in the pool with a coach.

What to Look For in an Angel Community

Not all communities are created equal. Here's what actually matters:

Deal quality over deal volume. Some groups spam you with 20 opportunities per week. That's noise, not signal. The best communities, like Angel Squad, carefully curate what they share because they're investing alongside you.

Experienced practitioners, not just educators. You want to learn from people who've made investments and seen outcomes. Hustle Fund has backed over 600 companies. When their GPs share what they've learned, it's based on real data, not theory.

Active engagement, not passive consumption. Check if members actually interact. Do they debate deals? Do they share learnings from their investments? Or is it just a broadcast channel?

Aligned incentives. The community should succeed when you succeed. Angel Squad makes money when members make good investments because it strengthens the entire network. That alignment matters.

The Bottom Line

First-time angel investors who go it alone are playing on hard mode. The failure rate is high, the learning curve is brutal, and the financial losses can be significant.

Communities change the equation. You get pattern recognition faster, access to better deals, feedback on your thinking, and accountability for your decisions. The data is clear: investors who learn in groups outperform those who don't.

If you're considering angel investing, the question isn't whether you need a community. It's which community gives you the best chance to succeed. Look for quality deal flow, experienced practitioners, active engagement, and aligned incentives. Everything else is secondary.

Angel investing is hard. Communities don't make it easy, but they make it possible.