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The Big Investor Survey 2018 shows interest in startup investing is on the rise

by Startacus Admin

65% of investors say investing in a diversified portfolio of startups would help them reach their financial goals. The problem? They don’t know how to do it.

New data shows interest in startup investing is on the rise, driven by lacklustre returns in more traditional asset classes. Goncalo de Vasconcelos, Co-Founder & CEO at online equity investment platform, SyndicateRoom, talks through some of the key startup focused findings from their just released research titled the Big Investor Survey 2018.

"This week we released new research titled the Big Investor Survey 2018. This survey quizzed more than 1,000 UK retail investors on their investment practices, outlooks and appetites. The results were very telling: investors want to back forward-thinking young businesses, they just have no idea how to do it.

In fact, on average, investors say they would move 12% of their investable portfolio to early-stage equities – if only they had more complete information and better access to investment opportunities.

Betting on startups

Another worrying statistic revealed that half of UK investors (48%) are failing to achieve their financial goals. The fact that this number has increased since 2016 (46%) suggests that the current low-yield economic environment in the UK is having serious effects on the The Big Investor Survey

nation’s ability to reach its financial goals. Millennial investors seem worst affected, with 53% falling short of their ambitions.

Against the backdrop of dwindling returns, 35% of investors have noticed their appetite for risk increase over the last 12 months. Further, seven in ten (68%) investors say they would take on riskier investments – such as investing in early-stage businesses – if it gave them a stab at meatier returns. This number increases to nine in ten (88%) among struggling Millennial investors.

Meanwhile, a staggering 67% of investors expect returns from early-stage equities to increase over the next 12 months, with 65% considering a diversified portfolio of startups helpful in reaching their financial goals.

There’s never been a better time to be a startup

This latest investor data walks hand in hand with another piece of research we carried out last month. Early-Stage Equities: A Long-Term Study is a report compiled in partnership with independent research firm Beauhurst, which looked at a cohort of 578 companies that raised seed funding in 2011 and tracked their journey all the way to 2017.

In 2011 the cohort of 578 companies was valued at £1,571,764,770, with an average valuation of £3m. (The individual valuations were actually very wide ranging, the lowest being £18,000 and the highest, £138m.)

By 2017, the portfolio value had risen to £10,035,471,734.

The combined valuations of these startups had risen by 30%. That’s blisteringly fast growth for any asset class. What’s even more impressive is that these startups have sustained this level of value appreciation for seven years running.

For comparison, companies listed on the London Stock Exchange grew at a compound annual growth rate of just 5% between 2011 and 2016.

No wonder investors are looking to riskier investments for their returns."

Goncalo de Vasconcelos is the Co-Founder & CEO at SyndicateRoom - a leading equity investment platform that helps companies raising finance from idea stage all the way up to IPO in the London Stock Exchange.

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Published on: 23rd March 2018

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