What do a chef in Turkey, a pilot in Australia, a physical therapist in Oregon, a submarine operator in the military and a DJ in the Bay Area all have in common?
They are all members of Hustle Fund’s Angel Squad, an investment community for new angel investors.
Hustle Fund is an early-stage-focused venture firm built by former 500 Startups partners Elizabeth Yin and Eric Bahn, which closed its third fund, with $46.1 million in capital commitments, last September.
In 2021, the firm came out of stealth with Angel Squad, which was formed with the goal of making angel investing more accessible to more people. Via Angel Squad, Hustle Fund has aimed to build an inclusive investor community, make minimum check sizes low and accessible (think as little as $1,000), provide “angel education,” and give investors a way to invest in startups alongside Hustle Fund.
What started out as an experiment of sorts has turned into Hustle Fund’s biggest revenue generator. Angel Squad has grown to over 1,500 members, up from 900 last September and over 3x what they were in the second quarter of 2022, according to Angel Squad co-founder Brian Nichols.
“This is very counter to the narrative that angel interest has decayed. I think that is absolutely true in the tech ecosystem, but I think the curiosity of folks outside of tech has only increased,” he told TechCrunch. “They’re able to think more objectively, so they realize that now is a much better time to invest than during an overhyped bull run.”
To date, Hustle Fund has invested $23 million via special purpose vehicles (SPVs) into 65 deals with Squad members in companies such as Rupa Health, Karat and Forage. Currently, Angel Squad accepts 250 Squad members for each of its quarterly cohorts. The group hails from all over. Seventy-five percent of members are based outside of the San Francisco Bay Area and 25 countries are represented. Ten percent are underrepresented and 30% are female. Singapore is home to the third largest population of Angel Squad members, behind only the Bay Area and New York City.
One reason that Hustle Fund may be attractive to wannabe angels is that you don’t have to be accredited to become a member. In fact, the firm says non-accredited angels are not only welcome, but Angel Squad will also compensate for the cost of the Series 65 test. Only accredited members can invest as angels, per SEC regulations. Members can join the squad by paying either a quarterly or an annual fee.
“Unlike some other angel groups or status-oriented groups, we really don’t want it to be like a mark of, ‘I’m in the club and you’re not’ or ‘I’m in this exclusive thing and you wish you could be in it,’” Nichols added. “It’s the opposite of that. We want it to illustrate that they are part of an inclusive community that’s open to everyone. . . . Something we really believe in Hustle Fund is this mission piece of empowering more angel investors to fund companies in the same way that Hustle Fund empowers more founders to start companies. I think you start to see the second and third order impact of that over time as the founders and the investors start to become much more diverse in nature.”
To Bahn, Hustle Fund co-founder and general partner, Angel Squad is attempting to redefine what it means to be an angel investor.“For the longest time, an angel investor was just a rich white dude on Sand Hill Road and that was also just a VC. It was like the same thing. But what about everyone else in the world? There’s so many people who should be doing this and they don’t think they can. And they don’t know where to start,” he told TechCrunch. “We’ll show you where to start and give you access to invest alongside us.”
To become a member, Nichols said, the No. 1 criteria is that a person not be an “a-hole.”
For AngelList CEO Avlok Kohli, Angel Squad’s mission is very much in line with his organization’s.
“While the names sound familiar, there’s no relationship other than Angel Squad is a customer of AngelList. It’s not a competitive relationship,” he wrote via email. “We’ve built the platform for other VC funds to build their business off of.”
Angel Squad, in his view, is building “a captive network of angel investors and in some cases, opening up access for more people to invest in startups. Not many funds are actively doing this,” he added.