Yes, You Can Angel Invest $5k Direct

You don’t need to write a $50k or $100k check to invest directly in a startup. I’ve written tons of $5k and $10k checks. Here’s how it works…

Starting out, I did all syndicate investments, paying 20% carry each time. Now, most of my investments are direct.

When I made my first direct investment, I was intimidated. It sounded mysterious and difficult.

But it’s not.

It all starts with finding the right startup and getting a spot in the round.

How I Get a Spot, Even as a Little Guy

I’m upfront with founders about check size. If they only want huge checks, I’m not the investor for them.

When I meet a startup I love, I help them as much as I can. I make a bunch of intros to VC’s, helping them line up meetings.

I also tell the founder exactly why I love their company.

Take Nick at Verustruct. His 3D printing robot will build the homes to solve the housing crisis. That’s incredibly exciting!

The founder sees I can help him. He also sees that I care about the mission.

Helpful investors who care about the mission — that’s what founders want. So although my checks aren’t huge, I rarely miss a deal.

How The Investment Works

On the settlement date, the founder sends me the paperwork and wiring information. I e-sign the paperwork and wire the money.

It’s very simple and takes maybe half an hour. I confirm they got the money, in case the bank messes up.

But What About Legal Fees?

Early on, I heard you couldn’t invest less than $50k directly because of legal fees. This isn’t true.

At pre-seed and seed, everyone raises on SAFEs. All documents are standard.

I run the docs through an LLM to be sure I’m signing a standard SAFE.

I haven’t incurred any legal costs doing deals. Neither have other angels I know.

Wrap-Up

Small investors absolutely can invest directly.

It’s not difficult. Many great founders will be happy to have you.

I still invest through syndicates too, paying 20% carry for the privilege. I want the best deal, wherever it comes from.

But I’m no longer afraid to go direct. And if I save that 20%, even better!