The landscape for entrepreneurs and investors is more accessible than ever before, and Generation Z is keenly aware of the possibilities that lie ahead.
- As Generation Z begins to wield more influence within the economic sphere, both startup founders and venture capital firms are increasingly seeking their insight and advice.
- Members of Gen Z are utilizing their personal branding to engage in more investment opportunities and establish their own investment funds.
- Recent changes in SEC regulations have also made it easier for younger investors to enter the field.
Gen Z has become a focal point for many startups, leading to the emergence of Gen Z VCs, a digital forum where young investors exchange insights and opportunities. Since its inception in November 2020, Gen Z VCs has expanded to include over 10,000 members.
“Being entrepreneurial, digitally native, focused on values, and unwilling to accept the status quo defines our generation,” explained Meagan Loyst, the 24-year-old founder of Gen Z VCs and an investor at Lerer Hippeau. “Venture capital allows us to embody all these characteristics, which is why you’re seeing a significant number of Gen Zers entering the field.”
Startup founders and investment firms appreciate the fresh perspectives and trend awareness that Gen Z brings to the table. At Lerer Hippeau, Loyst focuses on identifying startups and products that resonate with her generation, aiding founders and investors in tapping into this coveted market.
“I represent the core demographic for many of the companies we talk to, making my viewpoint extremely valuable,” Loyst noted.
Harnessing Personal Brands for Influence
Individuals like Jonathan Chang are leveraging their social media presence to gain access to investment deals.
Chang, 23, began discussing venture capital on TikTok during the pandemic, which led to a rapid increase in his viewership and followers. He has since started his own syndicate and scout program, and currently serves as an associate at Global Silicon Valley.
“Gen Z has a knack for brand building, something that has personally benefitted me,” Chang remarked. “In the realm of early-stage investments, your network is crucial, and having founders recognize you through your brand can significantly impact your investment opportunities.”
Paige Finn-Doherty, 22, found her first investment opportunity after founders read her children’s book on venture capital. This early achievement helped her co-found Behind Genius Ventures, a seed-stage investment firm focusing on growth companies. Since its launch in March, the firm has made a dozen investments, with Tribe Capital and Bonfire Ventures as limited partners.
“Our success can partly be attributed to the fact that more founders are from Gen Z, who rarely get to interact with peers during fundraising,” Finn-Doherty explained. “Founders prefer having peers in their investment circle as we share a similar outlook.”
Easing Entry into Investing
Innovations in technology and financial tools, alongside the democratization of investment knowledge through the internet, have simplified the process for young investors like Loyst, Chang, and Finn-Doherty to start their ventures and funds. Additionally, recent SEC regulations have broadened access to private investments, introducing new criteria that allow individuals to qualify as accredited investors based on professional knowledge, experience, or certifications.
This regulatory shift has enabled many in Gen Z to establish their own funds and invest in ventures led by their peers. Ryan Li, a junior at Stanford University and investor, mentioned how his classmates are passing the Series 65 exam to gain accredited investor status, with some even leveraging their cryptocurrency holdings to meet wealth criteria.
Li created his list of syndicate, Deep Ventures, during a gap year prompted by the pandemic. He is driven by the desire to carve out a unique career path.
“We’re early in our careers, which gives us the liberty to be daring and take risks,” Li stated.
Venture Capital Initiatives on College Campuses
Programs like Dorm Room Fund are fueling Gen Z’s interest in venture capital right on their college campuses. Supported by First Round Capital, Dorm Room Fund recruits students to identify and evaluate investment-worthy startups among their peers. Students involved in the scout program conduct due diligence, prepare deal memos, and make investment decisions.
Since its establishment in 2012, Dorm Room Fund has invested in over 300 companies and collaborated with 250 student scouts, 76% of whom have gone on to launch their own startups or work in venture capital.
“The beauty of working with Gen Z students is their fresh perspective, unencumbered by traditional investment patterns,” said Molly Fowler, CEO of Dorm Room Fund. “This openness allows us to make bolder investments that have often resulted in significant returns.”
As the oldest members of Gen Z are only around 25, they are just beginning to make their mark on the professional world, aiming to reshape both venture capital and entrepreneurship.
Loyst highlights sectors like the creator economy, edtech, social gaming, and digital health as areas of interest for Gen Z VCs, who also prioritize investments in female and minority founders.
“Gen Z VCs are determined to challenge the conventional narrative around entrepreneurship and venture investing,” Loyst
