Generation Z has been in the workforce for a few years now, a lot of them itching to carve out their paths. Being the first generation that grew up as digital natives, entrepreneurial Gen Z’s are aspiring to invest in and start their businesses in the area that shaped their lives growing up more so than previous generations — tech. Gen Z appears to believe in the positive impact of Internet-connected technologies more than other generations.

It’s not a surprise because as much as 80% of Gen Zers aspire to work with cutting-edge technology. At the same time, with the tools available to them, this generation has not been shy of putting their money where their mouth is. So don’t be surprised that your next investor will be a Gen Zer — which is why it would be good to know who they are as entrepreneurs and investors.

Who is Gen Z? Entrepreneurial differences between millennials and Gen Z

Millennials and Gen Z, in some cases, continue to be lumped together whether as consumers, employees, entrepreneurs, or investors. This shouldn’t be the case, of course.

Gen Z’s are the most Internet-dependent generation

• Millennials may be tech-savvy, but Gen Z’s are tech natives — if not at all tech-dependent. For example, a 2020 study reported that 58% of Gen Z said they could not go beyond four hours without the Internet before becoming uncomfortable. This compares to 49% among millennials, 40% among Gen X, and 30% among baby boomers.
• Gen Z’s are more likely to seek answers and solutions independently. A do-it-yourself mentality is one of the hallmarks of Gen Z entrepreneurship. Gen Z’s are more likely to access online courses or tutorials to solve a problem or learn a new skill, whether free or paid.
• Gen Z’s grew up knowing that they can register a business, build a website, open an online store, do their accounting, and conduct plenty of other business-related tasks through digital or online tools with little to no cost.
• This also impacts how Gen Zers prefer to work — and eventually manage their businesses. With more and more people, not just Gen Z, being allowed to have hybrid working arrangements, if not fully remote, the youngest workforce has also embraced hybrid environments. However, with those still in school who have gone through the ups and downs of remote learning, it remains to be seen how much in-person experiences Gen Z will be open to in the context of work.

Social impact at the heart of Gen Z DNA

• As employees, Gen Z considers the core values, ethics, and social impact of the companies they want to work for more than previous generations. This trend grew in prominence with millennials. For example, 52% of millennial investors consider social responsibility an essential criterion in selecting their investments, compared with 42% of Gen X and less than 30% among baby boomers.
• Gen Z’s are also more attuned to identity, inclusion, mental health, and other issues that will likely shape their management philosophies. For instance, in choosing a company to work for, Gen Z prioritizes diversity in race, gender, and orientation more than any other generation. This should find its way into hiring practices among the next wave of startups.

Curating and leveraging their brand

• Unlike millennials, Gen Z grew up with social media as a default component of their relationships with their peers. While this type of attachment has pros and cons, Gen Z has leveraged its social media clout for entrepreneurial opportunities.
• This has also enabled the rise of creator or influencer entrepreneurs whose very businesses center around their online identities.
• Self-expression and authenticity through their online profiles are valuable to Gen Z. It won’t be surprising to see Gen Z-owned businesses become extensions of their owners and belief systems.

Consumption can be about access, not necessarily possession

• Thanks to their generational predecessors who pioneered subscriptions and the sharing economy, Gen Z are much more accustomed to accessing products than owning them. As a result, Gen Z’s consumption includes access, not just possession.

Why Gen Z’s are excelling at venture investing

This new cohort of “Zillennials” inherit an environment with investing opportunities unavailable to previous generations. Here’s how Gen Z is making the most out of it.

Their VC stories

• This 21-year-old has invested an average of $2,500 in several early-stage startups. In addition, he invests in emerging tech startups to complement his parents’ portfolio of traditional assets.
• This 22-year-old was offered her first allocation by founders who read a children’s book she wrote about the world of VC. She then co-founded a seed-stage firm, which has made dozens of investments.
• This 24-year-old founder, who has invested in 25 deals, made his first investment in a company whose founder he engaged and kept in touch with on social media.

The “most disruptive generation ever.”

A Bank of America report forecasts that Gen Z will see their income surpass millennials by 2031. Moreover, their economic power is the fastest growing across all generational cohorts. Already seen as the core influencers today, Generation Z is expected to be “most disruptive to economies, markets, and social systems.” They are born into an online world, and digital technology is central to their worldview as consumers, entrepreneurs, investors, and citizens. So it’s exciting to see how the next generation of startups led and owned by Gen Z will make their mark.

Are you working on a startup or looking to partner with them? Reach out to our associates at Radiant Digital Ventures today.