Small Angel Checks Make the Startup World Go Round

Small angel investors make the startup world go round - founders could be missing out by setting a high minimum check size.

The SAFE has come to dominate angel / early startup investing, mostly because of decreased legal costs and time. So we looked at over 19,000 SAFEs signed by startups in 2023.

All of these SAFEs went to companies that had yet to raise any priced equity. Some may be part of "seed on SAFE" rounds, others to true pre-seed companies.

Small checks (under $25K) made up a full 62% of all checks signed in the earliest rounds (those under $250K total raised). Even rounds that came in just under $1 million had major participation from small checks.

In fact, the median check size for all rounds $1 million or less never got over $25,000 last year.

What do these small checks bring to a founder?

Julian Weisser of On Deck suggests:

1. Expertise = They can help in a particular area (GTM, sales, hiring, etc).

2. Network = They can introduce you to other investors, potential customers, or future teammates.

3. Legibility = their involvement will help in the areas mentioned above and positively impact how other investors view your company.

And sure, the total capital from these small checks may only account for a sliver of the total round. But they can demonstrate progress, push forward momentum, and the angels themselves may open doors to larger investors down the road.

We are also seeing many initial advisors to nascent startups become strategic angels down the line. Lots of ways to improve your cap table.

Here's to a year of small checks!

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