Could Accredited Crowdfunding Be the Opportunity Young Accredited Investors are Looking For?

iCrowd | First Published September 18, 2013

Millennials 300x147 - Could Accredited Crowdfunding Be the Opportunity Young Accredited Investors are Looking For?Every generation leaves its footprint. Baby Boomers changed the way society thinks of aging, parenting and civil rights. At an estimated 80 million, Millennials (also known as digital natives, Echo Boomers and Generation Y) are the U.S.’s largest demographic, surpassing even the Baby Boomer generation. They are likely to reshape society in profound ways.

For starters, Millennials are the first “always connected” generation. A generation defined by the gadgets they use and information they share on social networks. They are entrepreneurial collaborators that are transforming the workplace and the wealthiest of their generation are already changing the investment landscape.

Many young accredited investors aren’t following the same investment path as their predecessors. Fewer turn to stocks, shifting their focus instead toward private company securities, according to a recent survey by iCrowd.  The survey found Generation Y investors have an interest in alternative assets and are less focused on stocks than older generations. The survey found that investors aged 18-29 have an average of 30% of their investment portfolio in equities as compared to 48% for baby boomers. Nearly half of young accredited investors invested in private company securities (private placements and angel investments).

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"When it comes to investing, Millennials take a less traditional, and much more open approach than their parents did," said Brad McGee, co-founder of iCrowd. "Young accredited investors look at diversified opportunities outside of traditional equities in order to protect and grow their portfolios."

Investing is not just about making money for Millennials. They see money as a path to career freedom providing them with the opportunity to do the type of work they want to do or start the business they’ve been dreaming of. Instead of splurging on cars and homes, a recent Business Insider article highlighted how some young wealthy investors splurge through angel investing. They’re investing money to support the businesses of friends or startups in industries they are passionate about.  While they realize there is risk involved in investing in early-stage businesses, they are hopeful their investments will eventually pay off.

Accredited crowdfunding caters to self-directed investors, a trait that Millennials embrace. Easy access to information has made Generation Y more self-reliant when making purchasing and investment decisions.  They want control over what they invest in and seek out investments that best reflect their values.

As a generation that embraces sharing everything from their favorite musician to the brands they “like” on Facebook, Millennials see the information shared on social networks as a reflection of themselves. The companies they invest in also reflect their values. One example of this was revealed in the iCrowd survey, in which over one quarter of young accredited investors rank investing in businesses that support the local community a top consideration when making investment decisions.

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