When Friendship Means a $10,000 Check

In Silicon Valley, backing a friend's startup is a completely normal way to stay in touch

- Joshua Brustein

Maia Bittner is an angel investor, and she has a lot of friends who've founded startups. Sometimes they ask her if she wants to put money into their companies. Bittner used to feel prickly about it-she didn't want them to assume she'd write a check just because they're friends.

At some point, however, she realized that being buddies with someone was a great reason to write them a check. "The fact that they are my friend means there's something cool and interesting about this person," says Bittner, who's founded two companies of her own: Rocksbox, a jewelry rental service, and Pinch, a fintech startup. For someone she considers a good friend, she'll sometimes invest blindly, without knowing what the company does, because she trusts their judgment. "Investing in my friends is super cool," she says. "I get to support them. If they do well, I do well. If not, I'm helping them be entrepreneurs."

In certain elevated strata of Silicon Valley, Bittner's no-boundaries attitude has become common. Angel investing, historically the realm of the ultrarich, is now a pastime for the tech set, who often find themselves with extra cash on hand and entrepreneurial friends looking to raise money. Even beyond wealthy people investing their own money directly into startups, small-check investment is more prevalent than ever. According to PitchBook, 449 micro-investment funds, which have $50 million or less in assets, were raised in 2021100 more than in any previous year. These funds tend to invest in younger companies and write smaller checks than larger venture funds.