Gen Z-ers want to become VCs while they're still young, and they're building a growing movement to make that happen
- Generation Z is bucking the trend of needing to spend years working as founders or tech executives in order to become venture capitalists.
- Many are sharing tips on how to break into the industry and discussing deal flow on Gen Z VCs, a Slack workspace created in November that now includes over 3,000 people.
- Gen Z investors say their age gives them a better understanding of startups that cater to younger audiences.
- That advantage fueled the rise of TikTok stars Josh Richards, Bryce Hall, and Griffin Johnson, who have invested in at least six startups this year.
- Visit Business Insider's homepage for more stories.
When famous tech investor and Forerunner Ventures founder Kirsten Green was looking to hire a junior analyst for her venture firm, she ran a public process because she wanted to open up the funnel and hire outside of the traditional Silicon Valley network.
What happened next surprised her.
She received hundreds of applications for the analyst role, but most of them came from one demographic: people under 23, members of the so-called Generation Z, who had barely any experience in the industry.
She ended up filling two analyst spots at her firm, but she also wants to find a way to capitalize on her new network of young investors.
"They're thinking about the world that they live in and what it's going to look like when they're still around to be part of it," Green told Business Insider. "It's not looking good right now so they want to change it."
Though Green didn't know it at the time, what she witnessed is part of a growing wave of aspiring venture capitalists determined to challenge traditional hiring orthodoxies and break into the Silicon Valley ecosystem early.
They're contesting the conventional wisdom that VCs first need to develop their credentials as successful startup founders or tech executives. Instead, they say their age gives them a better understanding of startups catering to younger audiences, not to mention the ability to form more honest relationships with Gen Z founders.
"I'm the target demographic for a lot of the companies that we're looking at," Meagan Loyst, an analyst at Lerer Hippeau, told Business Insider.
Loyst, 23, landed her job at the early-stage investing firm after sending a cold email earlier this year and has since been outspoken in favor of bringing more young investors into the Silicon Valley ecosystem.
As an investor, she's looked at companies targeting Gen Z audiences like the women's underwear maker Parade, which uses sustainable materials and employs models of diverse backgrounds and sizes. "A lot of that resonates, both as an investor and as a consumer," she said.
The birth of the Gen Z VCs community
After getting hired, Loyst wondered if there were other young investors she could connect with, and created a Slack workspace called Gen Z VCs in November. When Business Insider spoke with Loyst that month, there were 700 members on the network. Now, she says there are over 3,000.
The group includes full-time investors like 21-year-old Gaby Goldberg, an analyst at Bessemer Venture Partners who only one year ago thought she was destined for a career in management consulting. But it also includes interns, undergraduates working at college funds like the University of Connecticut's Hillside Ventures, and others curious about the venture industry.
The group has spawned a series of new initiatives, such as biweekly forums on the social audio app Clubhouse, where selected panelists from the community share insights on specific investing topics like the creator economy or edtech. VCs in the group also do biweekly Zoom meetings where young founders can pitch their companies.
"What's so unique about Gen Z VCs as it's grown and scaled is that you see the power of Gen Z as a demographic, as opposed to just investors," Loyst said.
And the investors on the platform are also sharing how they broke into the industry, sometimes through lucky encounters with senior investors or just a well-crafted cold email, encouraging new Gen Zers to pursue an immediate career in VC as a result.
"People are seeing there's not one typical path," Loyst added.
Gen Z, but make it TikTok
The Gen Z VCs community has certainly been noticed by more established VCs. Investors like Harry Stebbings and Alexis Ohanian, for example, have joined some of their discussions on Clubhouse.
But another trend that's taken Silicon Valley by storm is the rise of TikTok stars who become tech investors.
This summer, three of the TikTok's most popular stars, Josh Richards, Bryce Hall, and Griffin Johnson, decided to become angel investors.
The three influencers are part of a broader group of TikTok celebrities called the Sway House and have attracted a fair share of scandal and controversy, including for throwing a large, unmasked party during the pandemic. But tech founders have mostly welcomed them with open arms.
For example, Joseph Albanese included Richards, Hall, and Johnson in his startup Stir's $4 million seed round. The company helps influencers and creators manage business tasks like splitting revenue and securing brand deals.
"We're creating new concepts for creators to monetize and work together. We need [their] fresh perspective to stay relevant," Albanese told Business Insider.
So far, The Sway House members have invested in at least six startups, including fintech provider Lendtable and home-building company Atmos.
This month, early-stage venture firm Remus Capital, which invests in startups that cater to Gen-Z consumers, also hired Richards as a formal investor. That was around the same time TikTok star Charli D'Amelio announced she was investing in teen banking startup Step's $50 million Series B round.
"They have the attention of a younger, more digitally native audience than most other people," Anthony Pompliano, a VC who cofounded investment firm Morgan Creek Digital, told Business Insider. "There are a lot of entrepreneurs that want to get in front of that audience, so the Sway House is a great way to do that."
Forerunner's Green has even loftier aspirations for the coming generation as they take on more and more investing roles in Silicon Valley.
"Whenever I want to get hopeful about the future, I really spend time with Gen Z," she said. "I don't want to go so far as to say moral compass, but I think they're focused on the right things."
"Staying in touch with them and keeping a pulse with them is what we're all about because they have good ideas," she added.
21-year-old Gaby Goldberg describes the cold email and surprise phone call that landed her a VC job at Bessemer
The Sway Boys rose to TikTok fame on dance videos and pranks. Now the 18- and 21-year-olds are VCs, wooing startup founders at their opulent LA mansion.
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