😇 Angel investing: Beginner's reading list

Where do you start when you're first considering angel investing?

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When someone first considers angel investing, I inevitably get the question of where to start: what should I try to understand first? How much of my income should I dedicate to angel investing? Who should I speak to? Where should I find my first deal? What should my investment framework be?

Here’s a compilation of all the resources that I first relied on when I was getting started, but the content is from angel investors who are a lot smarter than me and who have been doing it for a lot longer than me. If you’re interested in starting to angel invest or know someone who might be, please refer them to this guide.

General guidance

How to be an angel investor (Paul Graham, March 2009, blog, est. 19 mins)

PG, the founder of Y Combinator, sold his start-up in 1998 and then started angel investing seven years later. It seemed mysterious and complicated but turned out to be easier than he expected.

Start-up Investor School (Y Combinator, March 2018, YouTube, est. ~6 hours)

This was a helpful and free resource that my friend Ali recommended to me when I was originally starting to angel invest. They had different partners and founders from Y Combinator come to talk about angel investing and my mind was blown. Eventually, I want to go back and watch the whole thing again. They cover the fundamentals of investing, from investing instruments to legal and accounting basics to evaluating startups and managing deal flow.

Angel: How to Invest in Technology Startups--Timeless Advice from an Angel Investor Who Turned $100,000 into $100,000,000 (Jason Calacanis, July 2017, book, 288 pages)

Jason is an early angel investor, he started angel investing more than 10 years ago. The title of the book might be a little clickbaity but he does have some helpful tips. One that I still remember to this day is that when you start investing, take a look at the cap table and reach out to co-investors that way to see who might be investing in the same verticals and would be good partners to share deal flow with.

Angel investing: start to finish (Holloway, February 2021, book, 300 pages)

Holloway has been writing beautiful and deep analyses into different topics and this one an angel investing doesn’t disappoint. They explore how lead investors evaluate deals, how legal teams write up term sheets. The only thing to consider is that it might focus more on priced rounds and as an angel investor, you might be evaluating deals based on SAFEs, which have different legal considerations and economics to consider.

FTTea with Cokie: So You Wanna Angel Invest... (Cokie Hasiotis, January 2021, blog, est. 8 mins)

Cokie wrote a great article after making her first angel investment. To sum it up, 1. back people, not ideas, 2. secure your own bag first (max your 401k, have a solid emergency fund, etc), 3. get to the root of what your goals are for angel investing and make sure you’re getting that out of the experience.

How to be an angel investor in early stage startups when you don’t have any money (Maia Bittner, February 2021, blog, est. 9 mins)

Maia provides a helpful framework for what to focus on when first angel investing but not having the ability to write big checks. She breaks it down by two axes: 1. having special knowledge and 2. knowing the right people.

How to Angel Invest, Part 1 (Naval Ravikant, November 2019, podcast, est. 39 mins)

Naval is the founder of AngelList who has made angel investing more accessible. In this podcast, he shares more advanced topics covering the pitfalls of bridge rounds; how pro-ratas work; how can you squeeze into a round when there are VCs leading; when a co-investor is providing a valuable signal versus when they’re just talking their own book; how to size up markets and startups quickly; whether you should specialize in a single vertical or diversify into multiple verticals. Considering how much the landscape has changed in the last 1.5-2 years, getting to an oversubscribed round is even harder than it was then…

10 Essential Tips For New Angel Investors (Chris Smith, September 2020, article, est. 6 mins)

I like the first tip that Chris shares: “don’t rush.” When I started investing there were always these deadlines that stressed me out: the round is closing, the founder needs commitments, I met the founder a week ago and need to send an answer. If it doesn’t feel right, then take your time. You might say “no” for this round, but there will be more opportunities later.

Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups (David Rose, April 2014, book, 304 pages)

This might be a little outdated at the moment, but it does give a general overview of what angel investors should consider. From an angel investor point of view, it feels like it comes from the lens of a wealthy individual instead of an angel operator so it might be best to look for portfolio construction information from other sources.

Day in the life

All the Angels interviews (Angela Santurbano, blog)

I’ve done 18 interviews so far with different angel investors with different backgrounds and these are great examples of what an angel investor thinks about, especially with the new rise of angel operators, angel founders, and venture investors personally investing.

It's About Damn Time: How to Turn Being Underestimated into Your Greatest Advantage (Arlan Hamilton, May 2020, book, 256 pages)

This is an amazing and inspiring story of a rise of a venture investor who didn’t come from the same background as most venture investors. Even though, this is someone’s professional entry into venture rather than angel investing, it’s a shining example of not to give up hope even if you don’t have the average background of an investor.

In her own words: “From a black, gay woman who broke into the boys’ club of Silicon Valley comes an empowering guide to finding your voice, working your way into any room you want to be in, and achieving your own dreams.”

The Cap Table (Shamus Noonan, blog)

Each week the team highlights investors, operators, founders, and industry leaders in the private markets to share their tribal knowledge of how to get onto “the cap table.” This is one of my favourite Substack newsletters to read to understand how angel investors and venture investors think.

I asked 7 angel investors how they got started, how they evaluate companies, and what they wish they had known (Jess Li, October 2020, blog, est. 11 mins)

Jess aggregates advice from different angel investors, sharing what motivated them to start angel investing and what advice they share with aspiring angel investors.

Honestly, Still Breaking into Venture (Sarah Holmes, March 2021, blog, est. 5 mins)

Sarah Holmes from Unshackled Ventures wrote this article about her experience one year into being a venture investor. Her learnings also felt applicable to my experience as an angel investor. For example: “Venture is a marathon full of 1-mile sprints”. As an angel, I try to carve out interim time speaking to founders for potential investments, finishing my evenings with calls however the next few years determining what’s going to count.

Operator angels

How to Get Started as a Microangel investor in startups? (Elizabeth Yin, January 2021, Twitter)

Elizabeth Yin has been a game-changer in pre-seed rounds and I’ve loved listening to her advice on the Pitch. In this tweet, she shares the lower barrier to entry (you can write a check as small as $1k), but to always assume $0 and weight towards a good portfolio construction.

The Angel J curve (Brianne Kimmel, December 2019, blog, est. 9 mins)

The Angel J-Curve is a guiding framework to better understand the opportunities available for operators in Silicon Valley-based on your time and revenue (social/working capital) in the ecosystem.

Operator-Investors: The Future of Venture Capital (Pathway Ventures, December 2020, blog, est. 20 mins)

Pathway Ventures share the three waves of operator-investors: the 1st wave of vertical-specific former operators (e.g. a16z, Greylock, Sequoia), the 2nd wave operator angels and the 3rd wave of operator fund managers. I continue to see a rise in emerging fund managers and I don’t see this stopping anytime soon.

Term sheets & Dilution

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist (Brad Feld, December 2012, book, 272 pages)

Brad has written the best book out there to understand and evaluate the term sheet and evaluates the different terms and sections with a fine-tooth comb. He will share what the difference is between pre-money and post-money, cap, discount rate, information rights, pro-rata rights, etc. This book can be a little dry but is a great reference book whenever you need it.

Primer for Post Money SAFE (Y Combinator, PDF, 31 pages)

Super helpful guide as I was considering how to evaluate SAFE agreements and whether to focus on a post-money valuation versus pre-money valuation. At first, it seemed like a minor detail but I realized how it could impact dilution and founder equity.

The case for and against pro-rata rights (Christoph Janz, November 2020, blog, est. 6 mins)

As an angel investor, you’re the earliest check into a start-up and will be given a certain % of the company based on how much you’ve invested. As an early-stage investor, you want pro-rata rights because the company will be going through multiple rounds of financing and over time your stake will be diluted as they issue more shares. Every shareholder can decide to invest more money to partially or completely offset the dilution or not invest and be diluted accordingly with pro-rata rights. However, there’s constant friction between early-stage investors who want pro-rata, later-stage investors who want a bigger percentage of the company, and founders being diluted throughout it all. Christoph suggests a solution to this tough situation.

We only have 100 points of equity to split up (Charles Hudson, December 2020, blog, est. 5 mins)

Charles brings to attention the hard balance between founder dilution and investor ownership for early-stage and late-stage investors. I don’t think there’s a solution at this point but I think it’s a good conversation topic that should be further explored.


the essential guide to syndicates (Paige Doherty, March 2021, blog, est. 13 mins)

Paige is an entrepreneurial investor who is leading her own syndicate. She also is an engineer at WorkOS, a company backed by Lightspeed Venture Partners. In this article, she illuminates the definition of a syndicate, the advantages and the disadvantages of joining one. She also shares some tips if you’re interested in setting up your own syndicate (Note: This would mainly apply for those setting up syndicates in the US)

Angel investing returns

Crowd Funding Edition: Real life Angel Investing Returns 2012–2016 (Yun-Fang Juan, October 2020, blog, est. 8 mins)

Angel investing returns are particularly opaque, Yun-Fang shares more about her experience and portfolio returns over a 4-year period. Interesting share-out for a topic that can be really opaque.

Angel Investments vs. Stocks: A Practical Guide (Yun-Fang Juan, February 2021, blog, est. 8 mins)

Yun-Fang shares a helpful guide to consider returns from angel investing versus stocks. The biggest difference between public markets and start-up equity is the illiquidity of angel investing: “I just had the first IPO announcement from my portfolio after 9 years. Matterport is actually my very first angel investment. It’s going to return about 40X but I had to wait for 9 years with a lot of ups and downs in between.”

Investing in Public: Non-Obvious Lessons from 100+ Angel Investments (Tod Sacerdoti, January 2021, blog, est. 20 mins)

This is a great in-depth essay about angel investment from a founder who has made over 100 angel investments. I will say he probably could find other founders who had the potential to succeed because he was a successful founder himself as the CEO of BrightRoll however I think the lessons still generally apply.

That’s the beginner’s reading list for aspiring angel investors. This will grow over time as we continue to see angel investing become democratized and content becomes more accessible for anyone looking to start angel investing.

Are there any topics you would like me to cover more deeply? Reply to this email or leave a comment.