Angel investors seem to be getting younger and younger. This new wave of 20 to 39 year old angels is proving to be a passionate and forward-seeking group within the angel investing community. Some are new in their careers and others are in their prime, but all have plenty of years ahead to grow and follow their angel investing passions.
They are from a generation well-versed in entrepreneurship. Many have taken college classes on the subject, have friends/family who are entrepreneurs or are entrepreneurs themselves. According to a 2014 study from Bentley University, 66 percent of Millennials—generally those born in the 1980s and 1990s—want to start their own businesses.
Millennials also have been exposed to the idea of investing in startups at an early age, and many got involved in the startup ecosystem right out of college. More than the generations before them, they have an ethos of wanting to be part of the “next big thing” that is exciting and ambitious. They have an interest in supporting their peers, sharing their experience and expertise, and being part of the same team to change the world. To me, they seem more interested than previous generations in helping each other out.
These peer traits really came out when I spoke with Dan Mindus, founder of NextGen Angels based in Washington, D.C. Mindus is a young angel whose introduction to angel investing was one of the best. Fresh out of business school, he worked for Angel Capital Association chair-emeritus John May where he learned how angel groups work and how to manage them. When Mindus made his first angel investment he was hooked. NextGen emerged when he saw a need for a group specifically for younger angels.
He obviously hit a latent need. In just three years the D.C.-based group is 300 members strong in five chapters across the country, with more chapters coming throughout the world. While Mindus believes there is much to be gained from rubbing shoulders with older angels, there are things that set apart younger angels and why they want to work together.
“The angels and the entrepreneurs we support are my peers,” he said. “We spend time together developing business and personal relationships. We invest in entrepreneurs who are working with us to build the innovation ecosystem.” Young angels have deal-flow from entrepreneurial friends, former and current co-workers at the large tech companies and venture capital firms many work at, and this builds a shared history and trust. These angels and entrepreneurs also socialize together more often and in a different ways than angels in their 40s and 50s.
Mindus says angels in their 30s can often provide more relevant advice to young entrepreneurs than older angels. For example, they may help an entrepreneur by drawing on a lesson learned six months ago, rather than 15 years ago. Also, views on industry trends are informed by current daily activities, which are also useful for conducting due diligence and helping their portfolio companies.
For additional perspective I also connected with Christina Bechhold who co-founded Empire Angels in New York City in part to get involved with the growing startup ecosystem in New York. Like all angels, she wanted to do more than just invest—she wanted to help entrepreneurs thrive.
“I've found that younger angels have a variety of motivations for investing—from a desire to leverage their experience and network to learning the ins and outs of early stage companies, to finding a new job or meeting other driven people their age. Since they typically invest in peers, there is a strong spirit of cooperation, support and eagerness – anything from building a financial model to tracking down an introduction. It's a unique dynamic that I think both angels and the founders they invest in find engaging and valuable.”
Younger angels also value speed. Getting a deal into their portfolio can happen fast, sometimes 30 days from presentation to due diligence to money wired. “The technology world moves at lightening pace, and winners are the fastest to market,” said Mindus.
Millennial angels also have time on their side, so quick exits aren’t necessarily on their agendas. They can definitely take more risks, and many do.
I admire the tenacity and excitement of younger angels. They bring energy, excitement and a different perspective. But there is also a lot our different generations have in common including values we share, investing in things that matter and building up our communities.
Today the average age of an angel is around 55 years old, but that number will move lower with the growing influx of emerging young angels. There is so much we can learn from each other and do together.
