Meet your next investor angel. They are 19 years old

At the beginning of the year, Johnnie Yu heard about a new startup that wanted to raise a small circle. As he liked the idea, he cut out the check. Yu is 21 years old and a junior at New York University. He is the same angel investor, financing startups in the initial phase. His investments are small (usually around $ 2,500), but they are real: in exchange for money, he gets a share of future equity in companies if he succeeds. The investment in emerging technology startups sees it as a way to complement the parent portfolio, which is made up of more traditional assets such as real estate.

Yu is part of a growing cohort Gen Z investors which have begun to make their mark in the early ecosystem. Some of them are now minors working in VC companies or pursuing careers as investors. Others, like Yu, are newcomers to angel investment, as new platforms and recent rule changes widen the opening of those eligible to participate. Young likes come together on TikTok and Twitter, where talking about startups can lead to valuable connections and a flow of deals. The Slack group called Gen Z VC has more than 7,000 members, many of whom are still in their teens.

For many of these Gen Z investors, investing in angels is not about getting rich and more involved in the initial economy for the first time. “Everyone expects to get refunds, of course, but most of the time you’ll lose money,” says Dayton Mills, a 22-year-old founder who has started making angel investments. “You’re buying access a lot of the time, and you expect to get closer to people. That can have a bigger impact on your investment than it does.”

Historically, angel investment has been on the table for young people because of the wealth requirements set by the Security and Exchange Commission. Anyone can buy shares in a public company, but investments in private companies are more risky and speculative, which has led to strict SEC regulations. Since the 1930s, only people with an income of more than $ 200,000 or at least a million dollars in wealth can make angel investments — which excludes most Americans and certainly most young people.

Two regulatory changes have made investments more affordable: In 2016, the SEC created new rules to help startups raise more money through financing, taking smaller checks from people who don’t meet the definition of a certified investor. Last year, it released an individual demand for accredited investors to turn people who “understood private markets” into angels. Now, those who work for private funds or have passed the licensing exam to prove their “financial sophistication” can participate, even if they don’t meet the SEC’s wealth requirements. And those who don’t can direct the money to a special purpose vehicle, where the main investor represents a group of people and combines their investments into a single union.

Mills and Yu, both members of the Gen Z VC Slack team, recently joined a union for a new dating startup called Snack. Its founder, Kim Kaplan, a millennium old and a veteran of the dating industry, was actively deafening Gen Z investors and putting $ 500,000 in Snack’s latest round of the Gen Z syndicate at AngelList, a platform for matching startups with investors. Kaplan has also raised money from traditional VC companies, but he believes it is important to involve young investors as well, as it provides direct access to the target user. “I’m still surprised that more companies haven’t gone down this path,” he says. “Why don’t you have your customers on the table?”