Earlier this year, Sara Rodríguez made one of her first angel investments after hearing about the deal through a Slack channel for Generation Z investors, venture capitalists and founders. She loved the idea of investing in new startups looking to raise a small figure so much so that she spends two to three hours studying about the startup ecosystem these days. Her investments are meagre – usually around $1,500 – but enough to rake a fraction of equity in startups, should they succeed. Sara sees her investments in tech startups akin to her parents’ portfolio, which is made up of assets like real estate.
Rodríguez is among a group of younger angel investors – part of the Gen Z, or those born after 1996, writing checks to invest in tech startups. A popular group on Slack, Gen Z VCs, was even formed to support aspiring angel investors, venture capitalists, and other young investors and founders. The group has grown to more than 6,000 members since it was formed in November 2020.
Not so long ago, there were formidable barriers to entry into angel investing. An individual had to be considered an accredited investors by the Securities and Exchange Commission in order to invest in most early-stage startups. Anybody can buy stock in a public company, yet investments in privately-owned companies are less secure and more speculative, which has prompted more tight regulations from the SEC. Since the 1930s, only individuals with an income greater than $200,000, or at least $1 million in total assets, could make angel investments—which bars most Americans, and unquestionably most young people, from participating.
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