Ajo Angels Weekly Pulse

Why your first angel investment is about getting in the game, not the money

I get this question all the time. "Abdul, how much should I have saved before I start angel investing?" People expect me to say $25,000 or $50,000 or some number that feels big and official.

But that's not the right question.

Your first angel check is probably going to be small. Maybe $5,000. Maybe $2,000. And that's not a problem. That's how it's supposed to work.

I see people get stuck on this all the time. They think angel investing is something you do when you've got serious money sitting around. So they wait. They save. They tell themselves they'll start when they've got enough. And then they never do it cause they're waiting for a moment that doesn't come.

The money isn't the point. Getting in the game is the point.

The Real Education Starts When You Write the Check

When you make your first angel investment, something changes in you. You're not reading about startups anymore. You're not watching from the sidelines. You're an owner. You've got skin in the game. And that changes everything about how you pay attention.

I made my first angel check for $25,000. That was years ago, and the barrier to entry was a lot higher back then. Today you can get started with way less. But the lesson is the same. I was nervous about it. I didn't know if I was doing it right. I didn't know if the founder was legit. I didn't know if the business model made sense. But I did it anyway.

And that check taught me more than a year of reading about angel investing ever could. When you've got money in a deal, you start asking different questions. You read the updates differently. You think about the market differently. You feel the weight of what it means when a founder says they're "pivoting" or "adjusting their go-to-market strategy."

You can't learn that from a book. You learn it by doing it.

The Size Doesn't Matter. The Consistency Does.

Here's what I've learned from watching hundreds of people get into angel investing. The ones who build real wealth aren't the ones who made one big check. They're the ones who made consistent checks over time.

Think about the math. If you make one $50,000 investment and it goes to zero, you're out $50,000. You're done.

But if you make ten $5,000 investments and eight of them go to zero but two of them return 10x, you've made $100,000 on your $50,000 invested. You doubled your money. And you learned something from every single one of those deals.

The people who get rich from angel investing aren't the ones who got lucky on one deal. They're the ones who got good at picking deals. And you only get good at picking deals by making them, seeing what works, seeing what doesn't, and learning to spot the patterns over time.

Your first $5,000 check is your tuition. It's the price of getting into the game.

You're Building a Skill, Not Making a Bet

This is the part people don't talk about enough. Angel investing is a skill, and like any skill, you get better at it by doing it, not by reading about it or thinking about it.

When you make your first investment, you're learning how to evaluate founders. You're learning how to read a pitch deck. You're learning what questions to ask and what red flags look like. You're learning how to think about market size and whether a business can scale.

All of that is worth way more than the $5,000 you're putting in. Cause once you've got those skills, you can use them at any check size. You make better decisions. You spot things other people miss. You build a portfolio that works.

The Network Is the Real Asset

Here's something else that happens when you make your first angel check. You get access to deal flow. You get invited to pitch events. You start seeing deals before they're public. You start meeting other angels and building relationships with founders and other players in the ecosystem.

That network is worth more than the money. The best deals I've ever seen came through relationships. And those relationships started because I made that first check and showed up.

When you're an angel investor, even a small one, you're part of a community. You get treated differently, and that builds over time in ways that are hard to see at first but impossible to ignore later.

Start Small. Build Momentum. Scale Up.

Make your first check as soon as you can. Don't wait until you've got a pile of cash. Don't wait until you feel ready cause you're never gonna feel ready.

Write a $5,000 check. Maybe it's $2,000, or $10,000 or even $1,000. Whatever you can afford to lose without it changing your life. Go through the process. See what it feels like. Build your network and get your reps in. Then write another check, then another. Well, it's more likely to be an ACH or wire but you get my meaning. 

The people who are gonna be wealthy from angel investing in five years aren't the ones waiting for the perfect moment to drop $25k. They're the ones who wrote their first small check today and got in the game.

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Funding: Raising $100K to expand beta testing, improve security integrations, and prove product-market fit

The richest 10% own about 90% of the stock market, so when stocks go up, most of the gains go to people who already have wealth?

Cheers,

Abdul

Hey Hey… I’m Abdul I’m the chairman of Ajo Angels and Shujaa Capital and I’m on a mission to introduce angel investing to 25,000 black folks over the next five years. I’m doing this with the goal of narrowing the racial wealth gap as well as trying to close the billion dollar funding gap for black founders.

This information is for educational purposes only and should not be construed as financial advice. Angel investing involves substantial risk, including the risk of total loss. Consult with a qualified financial advisor and attorney before making investment decisions.