How to start angel investing with smaller cheques: first steps, choosing startups & more

Angel investing can feel hard to navigate when you’re starting out. Finding the right opportunities, choosing your first deal and understanding the risks all take time, confidence and the right support.

In this webinar, Michael McDowell, Investor Lead at SeedLegals, speaks with Beth Carter, angel investor and Director of Product and Growth at Flexa. Together they break down what early stage investing really looks like, how to choose your first investments and how to build confidence as you go.

You’ll learn how to start with smaller cheques, how syndicates help you learn faster, what to look for in founders and how to think about valuations at an early stage. Beth also shares the red flags she avoids and the practical steps she took to build her own angel investing approach.

Key takeaways

Start small to build confidence and reduce risk

• Begin with cheque sizes you’re comfortable with. Beth started with 2.5k through a syndicate, which made the learning curve manageable.
  
• Syndicates let you learn due diligence by watching experienced angels in real time. This builds confidence fast without taking on unnecessary risk.
  
• Treat your first few investments as training rounds. Focus on learning how investors think rather than trying to pick perfect winners.

Back founders who show clarity, resilience and strong communication

• At early stage, founders matter more than financials. Look for people who explain the problem clearly and demonstrate real customer understanding.
  
• Build relationships well before you invest. Consistent communication and thoughtful updates reveal how founders behave under pressure.
  
• Favour founders who challenge assumptions and ask smart questions. It’s a strong sign of strategic thinking and long-term potential.

Choose deals in sectors you understand or care about

• Align your investments with industries you know or want to learn deeply. It improves your judgment and makes DD more meaningful.
  
• Avoid hype-driven decisions. Focus instead on whether the startup solves an urgent problem and whether customers genuinely care.
  
• Early traction can help, but clarity of insight is more predictive. Look for evidence that founders understand current customer behaviour and alternatives.

Use syndicates to share risk and improve your judgment

• Syndicates allow you to invest smaller amounts while learning from more experienced angels.
  
• You benefit from shared due diligence, deal flow and structured conversations about opportunities.
  
• Good lead angels coordinate the round, share information and keep things moving. This makes the process smoother and more transparent for everyone.

Understand how valuations and round dynamics shape your returns

• The largest cheque often sets the valuation. Smaller angels rarely negotiate terms, so decide whether the valuation fits your risk profile.
  
• Fair, realistic valuations help founders stay motivated and make future rounds easier, an essential factor for long-term returns.
  
• Strong lead angels keep the round organised. They coordinate communication, share key information and help the round progress smoothly.