Hustle Fund: Investing in the Next Generation of Angel Investors

Mission Spark Founder Joins Hustle Fund as Angel Investor

Kara Penn, a mother of four and the owner of Mission Spark, a management and strategy consulting firm, has expanded her role to include angel investing.

This new venture is made possible through Hustle Fund, which is officially launching Angel Squad today. This initiative seeks to broaden access to angel investing for individuals like Penn, who are based outside of traditional tech hubs.

Democratizing Angel Investing

“Our core belief is that increasing diversity within the startup ecosystem necessitates a more diverse group of angel investors – encompassing variations in gender, race, and geographic location,” explained Elizabeth Yin, co-founder and general partner of Hustle Fund.

Angel Squad is specifically designed to foster an inclusive investor community. It offers low, accessible minimum investment amounts – starting at just $1,000 – alongside comprehensive “angel education” and opportunities to co-invest with Hustle Fund.

Yin clarified, “There’s a common misconception that angel investing requires substantial wealth and $25,000 checks. However, in Silicon Valley, many investors are actually making $1,000 investments. This is far more attainable than many realize.”

“The strength of this group lies in its ability to pool smaller investments to collectively fund larger deals for promising companies,” she added.

Penn’s Early Experiences

To date, Penn has participated in investments in five startups spanning sectors like real estate, food, apparel, and finance.

Describing herself as a “complete novice” to angel investing, she has found the experience incredibly rewarding.

“I deeply appreciate Hustle Fund’s perspective that exceptional entrepreneurs can emerge from any background and location,” Penn stated. “I’ve valued being part of a supportive community where questions are encouraged, regardless of experience level.”

This experience is also expanding her understanding of emerging technologies, data utilization, and the creation of novel marketplaces.

“Given my company’s focus on strategy within social impact organizations, I’m particularly interested in identifying founders who are developing innovative solutions to complex societal challenges,” Penn said. “This exposure is prompting me to consider how these approaches can be applied to address difficult social problems.”

Hustle Fund’s Background

Hustle Fund was established by Elizabeth Yin and Eric Bahn, both former partners at 500 Startups. Their primary goal is to invest in pre-seed software startups.

The firm typically invests $25,000 in companies with a minimum-viable product, then provides support to facilitate their growth. They complete approximately 50 investments annually, as noted on their website.

Recently, Hustle Fund successfully closed a new fund with $33.6 million in capital.

A Broader Mission

“A key aspect of our work is a commitment to transforming the startup ecosystem,” Yin emphasized. “I’ve observed that certain backgrounds, educational institutions, and demographic characteristics can provide advantages in launching a company and securing funding.”

“For those who don’t fit these profiles, the process can be significantly more challenging. That’s why we prioritize investing in founders from diverse backgrounds.”

The Genesis of Angel Squad

Hustle Fund Venture Partner Brian Nichols initially created a syndicate of Lyft alumni on AngelList.

After several successful deals, he broadened the syndicate’s membership beyond AngelList users.

“I discovered a substantial interest from individuals worldwide, representing a wide range of backgrounds, in diversifying into private markets,” he said. “Hustle Fund and I shared a similar investment philosophy, which led to collaborative co-investments.”

Diversity in Action

Currently, Nichols is instrumental in managing the fund’s Angel Squad initiative. To date, it has included two cohorts with over 150 investors.

The initiative has demonstrably increased diversity within angel syndicates: 46% of members are female, 9% are from underrepresented minority groups, and 32% work outside of the tech industry in professions like law, medicine, and the arts. Only one-third are located in Silicon Valley.

Ongoing Engagement and Education

Angel Squad hosts weekly events, ranging from networking opportunities to exclusive previews of potential Hustle Fund investments and discussions on evaluating startup opportunities.

“Imagine starting with no prior experience and having Elizabeth (Yin) guide you through the process, helping you avoid costly mistakes during startup evaluation,” Nichols explained. “Angel Squad provides exactly that support, something I wished I had access to several years ago.”

Yin acknowledges the intimidating nature of Silicon Valley but stresses that expertise is rarely comprehensive.

“We aim to create a welcoming environment characterized by kindness – we enforce a ‘no asshole’ rule – where individuals feel safe to learn, ask questions, and not feel pressured to possess complete knowledge of angel investing. Most people don’t, and we want to welcome new participants into this system.”

Membership Criteria

Beyond avoiding disruptive behavior, prospective Squad Members must demonstrate the ability to add value and meet the requirements of an accredited investor.

“Given the competitive funding landscape, we seek individuals who are genuinely committed to actively supporting our portfolio companies,” Nichols said. “Each applicant is interviewed by our team, with questions focused on how they can assist founders. We are not seeking passive capital, as that is less beneficial in the current ecosystem.”