Teenagers are crypto-curious: our investment in Stack
Natalie Young, Will Rush and Angela Mascarenas, co-founders of Stack
Knowledge
Recently, we took a deep dive into Web3 and identified tools and experiences to make Web3 and Crypto accessible to consumers as a key focus area for Madrona. And today, we’re excited to announce our investment in Stack, which educates a young generation of crypto-curious (and their parents) about the ins and outs of the crypto market.
Stack is positioned to create a new category by being the first education-focused crypto app for teens. The Stack app differs from apps like Coinbase and Robinhood in that it allows users to access the tax and control benefits of a Uniform Transfers to Minors Act (UTMA) account while giving crypto-curious teens access legal to a commercial environment specially designed for them. At the age of majority, the assets are transferred into the teenager’s name.
Trust and banking products for under 18s have seen incredible growth through social media over the past few years. Teenage investors have entered the stock market in droves as the pandemic has created a unique climate for retail investors. The rise of investing content on social media has prompted Gen Z to take an interest in learning about finances at a much younger age, experimenting and learning to take responsibility and control of their finances in the process. Polls indicate that 71% of Gen Zers prefer financial information from people who look like them, which has led them to turn to the growing number of “finfluencers” – finance influencers – on TikTok. The hashtags #FinTok and #Investing have over 500 million and 3.7 billion views respectively. With increased interest in investing, trust products for the under 18s have recently spawned eight unicorns, including Gen Z banking products Step, Acorns and Webull. Last year, Fidelity also launched youth trading accounts.
Generation Z is considered an entrepreneurial generation. As a result, many of them are crypto-curious. Coinbase and FTX served as consumer entry points to crypto through crypto trading and educational content. However, they are inaccessible to miners – the next generation of consumers – curious about cryptocurrencies, Web3 and modern technologies.
Enter stack. Stack is positioned to create a new category by being the first education-focused crypto app for teens. We caught up with the Stack team when they entered and won Madrona Venture Lab’s (MVL) Web3 event, Launchable, earlier this year. Since then, Stack Founder and CEO Will Rush has blown us away with his passion for creating a product that safely educates the next generation about finance and crypto by doing rather than reading or watching. .
Along with his founding team, Natalie Young and Angela Mascarenas, Will prioritizes safety and education in the Stack app. The team did the heavy lifting to secure the first Uniform Transfers to Minors Act (UTMA) license for crypto trading accounts. These UTMA accounts are familiar to some families who have used them in the past to educate their underage children about saving and trading stocks and mutual funds. The account is owned and controlled by the parent until the minor turns 18, but the teen also has access and the ability to initiate transactions (which must be approved by the parent.) Parents can set trading and investment limits for their children. , and Stack requires all transactions to go through its platform rather than allowing users to move assets off-chain, eliminating the main fraud valve.
The Stack team built it in partnership with its customers. They created a high school ambassador program to engage early adopters and design a fun and educational product that complements today’s teen interests in finance, technology, and Web3. The team has numerous high school investment clubs across the country interested in embarking on the initial rollout. We find Stack’s 5,000-person waiting list for the iOS or Android app impressive.
Stack’s business model is carefully designed around education rather than business incentives. Unlike 18+ crypto exchanges, Stack monetizes with a subscription, not on a per trade basis. Users also receive small content served daily in the app and receive crypto as an incentive to watch.
Over the past two months, Will has worked with MVL and Madrona on initial product, team and launch strategies. We have been so impressed with their traction and passion and are excited to invest and help them grow. Additionally, we believe the Seattle Web3 ecosystem is on an upward trajectory and will be of increasing interest to Madrona. Stack launched its Android app a few weeks ago, which people can download from the app store. The iOS app is fast approaching and we are excited to have it available to consumers.
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