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 best angel investors aren't always the ones with the most startup experience. Sometimes they're the ones who spent 15 years in oil and gas. Or pharmaceuticals. Or logistics.

Industry operators bring something to angel investing that generalist investors can't replicate, they know what problems are actually hard. They can tell the difference between a founder who understands their market and one who's just read some blog posts.

This changes everything about how deals get evaluated.

What Generalists Miss

Venture scouts and associates coming out of big firms are smart people. They've seen lots of deals. They can pattern-match across industries. They know the right questions to ask about TAM and GTM and all the other acronyms.

But they often lack something crucial, they don't know which problems are actually hard to solve versus which problems just sound hard.

A generalist investor looking at a supply chain startup can evaluate the team, the market size, the competitive landscape. What they can't do is tell you whether the specific problem being solved is the one that actually breaks supply chains, or if it's a problem that sounds impressive but doesn't matter operationally.

An operator who spent a decade managing supply chains knows instantly. They've lived the pain points. They know which workflows break and why. They can tell if a founding team is credible or just credible-sounding.

This pattern recognition is impossible to fake. You either have it or you don't.

The New Wave of Industry Operators

We're seeing something interesting happen right now. There's a wave of industry operators in their 30s and 40s who are digitally native but spent their careers in traditional industries. They're looking at startups being built in their domains and thinking "whoever built this has never actually done this job."

That's an opportunity.

At Hustle Fund, we've started to notice this pattern in our deal flow. Some of our best portfolio companies are founded by people who weren't software engineers or product managers. They were operators in specific industries who saw inefficiencies and decided to fix them.

One founder told us: "I realized that the next wave of innovation will come from industry operators who are digitally native. You don't need to be a technologist anymore with AI. But you absolutely need to understand the industry."

We can solve for technology. We can hire engineers. We can build product. What we can't solve for is 10 years of domain knowledge in cannabis, pharmaceutical sales, commercial real estate, or industrial manufacturing.

That domain knowledge is the rare commodity.

The Advantage in Deal Evaluation

When evaluating a healthcare tech startup, would you rather hear from an angel investor who's backed 50 companies, or from a former hospital administrator who knows exactly which workflows break and why?

Both have value. But they provide different kinds of value.

The generalist investor can tell you if the company's unit economics make sense, if the go-to-market strategy is reasonable, if the valuation is fair. The industry expert can tell you if the problem being solved actually matters, if the solution will work in practice, and if the founding team understands the regulatory environment.

You need both perspectives. But at early stages, the industry expertise often matters more.

A former pharmaceutical executive can tell you which FDA regulations actually slow companies down versus which ones are manageable. They know which hospital buying committees matter and which ones are rubber stamps. They understand the sales cycle for medical devices in a way that no generalist investor can match.

This specificity is valuable. Really valuable.

The Network Multiplier

Industry expertise also creates network effects that generalist investors can't replicate.

A former pharmaceutical executive who becomes an angel can introduce portfolio founders to potential customers, partners, and future hires in ways that a traditional tech investor can't. Their LinkedIn network is full of people who actually work in that industry. Their text messages get returned by the head of procurement at major hospital systems.

This is particularly important at pre-seed and seed stages when founders are still figuring out product-market fit. Getting customer intros early changes everything. Talking to 20 potential buyers in your first three months lets you iterate faster than spending six months building in a vacuum.

Industry operator angels provide those intros naturally. They're not making cold LinkedIn messages on behalf of founders. They're texting their former colleague saying "hey, I invested in this company solving X problem, would you take a call with the founder?" That's a warm intro.

At Angel Squad, we've watched members build reputations as domain experts. Someone spent years in climate tech? Now the Hustle Fund team runs deals by them for that sector perspective. Someone knows enterprise sales for manufacturing software? They become the person everyone asks about those deals.

It's not that they're better investors generally. They're better at evaluating whether a specific type of startup will work.

Combining Expertise with Investment Discipline

A trap that industry operators sometimes fall into is they invest in companies with real domain knowledge but terrible unit economics or no path to scale. They overweight domain fit and underweight business fundamentals.

I've seen this happen. An operator gets excited because a founding team clearly understands their industry. The product is solving a real problem. The customers actually want it. But the business model doesn't work. The margins are too thin. The sales cycle is too long. The market is too small.

Domain expertise is necessary but not sufficient. You also need to evaluate whether this is a venture-scale opportunity. Can this company grow fast enough? Is the market big enough? Will the economics work at scale?

The best industry operator-angels learn to evaluate both. They assess "is this a real problem?" and "is this a venture-scale business?" Most angels only get one of those questions right.

This is where joining a community like Angel Squad helps. You can learn investment frameworks from professional investors while bringing your domain expertise. You get both sides of the equation.

Getting Started as an Industry Operator

If you're an industry operator thinking about angel investing, here's how to start.

First, identify your specific edge. What do you know that most investors don't? What problems have you solved that founders in your industry are struggling with? What's your unique knowledge?

Second, start meeting founders in your space. Go to industry events. Join startup accelerators focused on your vertical. Follow founders on Twitter. Make yourself available to give advice before you start investing.

Third, make your first few investments in companies where you can actually help. Don't try to back the hottest deals where you're just another check. Back founders who need your specific knowledge and connections.

Fourth, be honest about what you don't know. You're learning venture mechanics. You haven't seen 100 startups fail. You don't know all the ways early-stage companies die. That's okay. Be upfront about it. Founders respect honesty.

One of our Angel Squad members put it well: "I'm not trying to be Sequoia. I'm trying to be the best investor in my specific niche. That's achievable."

That's the right mindset. Find your niche. Go deep. Build relationships with founders in that space. Help them succeed. The rest compounds over time.

The startup ecosystem needs more industry operator-angels. Founders need investors who actually understand their markets, not just investors who understand venture capital. Your 15 years in oil and gas or healthcare or logistics is more valuable than most people realize.

You just need to start. Write small checks. Help founders in your industry. Learn the venture mechanics as you go. Your domain expertise will be your edge, but only if you put it to use.