Nick O’Connor – Exponential Investor (United Kingdom) –
The special investment call I’m hosting alongside crowdfunding expert Andrew Lockley is fast approaching.
It takes place in just a few days in fact – at 7:30pm on Tuesday 3 October.
On it, we’ll be looking at six little-known crowdfunding firms with the potential to become household names further down the line.
As well as getting you right up to speed with everything you need to know about this lucrative sector.
I sat down with Andrew recently to ask him why crowdfunding is such a big deal – and why investors should be looking to get into it as fast as they can – while it’s still relatively under the radar.
Here’s what he had to say…
Nick: Why should people be looking at this type of investment?
Andrew: Well, most people are attracted by the returns. And, I’ll admit, they can be spectacular. But there’s more to it than that.
Firstly, the government gives you great tax breaks. So you’re investing with what can be tax-free money. It’s like the chancellor is giving you a big cheque, just to invest.
Secondly, it can be a really rewarding way to invest. You get to see the firms that are changing the world. In many cases, you can get to meet the teams personally.
What’s more, they’re usually really keen to get ideas and help from their investors! That means you can be “smart money”.
Nick: So how do you go about getting shares in these companies?
Andrew: This is one of the things that’s difficult for regular people to get into. Most don’t have the first clue how you would get shares before they’ve gone public.
Of course, you can go online yourself and find firms to invest in. But that won’t help you any more than gawping at stock prices in the Financial Times. You really need to know what you’re looking for – and how to get direct access to these firms. It helps if you can work with someone who’s an insider… and has real experience.
On the call, I’ll show you precisely how to go about getting a stake in these companies – from beginning to end.
Including all the options you have in terms of investment platforms.
We’ll walk you through it step-by-step – from what to look for in pitch documents, to actually making the investment, right down to what’s on the table when it comes to taking the profits.
Nick: How much money do investors have to put in to begin with?
Andrew: The beauty of this kind of investing is that you can – if you want to – start with just a tenner!
Obviously not many investors choose to start with such a small stake, but if you just want to test the waters with some money you can afford to lose, then you can.
There are lots of different options available in terms of staking. I’ll cover that all on the call.
Nick: What’s the profit potential with these companies?
Andrew: Look, I’m not going to sit here and tell you exactly how much you’ll make. That’s just not possible. Every investment is different. And the payouts will vary. Not all investments are going to prove to be winners, either. That’s just a fact of life. But I’ve been in this business for a long time. I’ve seen massive gains in the exact types of companies we’re targeting.
Even the investments I’ve had to pass up were often spectacularly successful. My main regret is that I just didn’t have the capacity to invest in all the great deals I found.
Nick: Limiting risk is crucial. I’m sure everyone reading this wants big returns, but they’re also keen to preserve their wealth and retirement funds. How can you help them minimise risk?
Andrew: For starters, I’ll show you how I go about looking at the type of companies involved. And what you need to be looking at in terms of picking winning business models and markets.
I’ll show you how to navigate away from the companies you need to avoid at all costs. And how to home in on the best possible opportunities.
My strategy is about avoiding high-risk companies and targeting well run, efficient companies with great leadership and ideas and above all else… huge profit potential.
This game is all about portfolio building. It’s way too risky to “bet the farm” on a single firm.
And by targeting a group of companies, I believe you have a far better chance of seeing a huge potential upside.
In my experience you don’t want to put all your eggs in one basket. If you do that, there’s always a chance something will go wrong.
But with a range of six companies and upwards there’s a real chance to find huge potential upside with far less risk.
Even if you’re not lucky enough to bag a unicorn, using my strategy you should still see some really solid portfolio gains – but only if you pick the right firms.
I’ll show you everything you need to know on the call.
Nick: Do you need to be accredited to get into this type of investing?
Andrew: Not necessarily – again, I’ll cover this in detail on the call. But as far as I’m concerned – for many of the investment opportunities we are looking at – this is something most investors don’t need to worry about.
Nick: So can you give me some more information on the kinds of companies you’ll be looking at on the call?
Typically I focus on B2B, transactional businesses. But recently I’ve uncovered a bit of a wildcard in a firm called Lightvert – a London based tech firm that specialises in hyper-scale digital outdoor display systems. To my mind, it has an extremely bright future. Its first product, ECHO, can produce digital outdoor images 200m tall – which are some of the largest digital outdoor advertising images on the planet.
Lightvert is typically undervalued, and low-risk – which are two key ingredients for potential future investment success.
On the call I’ll be showing you exactly how to hitch on to firms just like Lightvert yourself. And as the date of the call approaches, I’ll be able to reveal some more information about the kinds of firms I’ll be looking at – so keep your eyes peeled for that.
Nick: So are you expecting the companies we’re looking at to go public? If so, within what sort of timeframe might they go public?
Andrew: Look, I can’t guarantee anything on this. Unforeseen events can always cause delays with this type of thing. And it wouldn’t be fair if I was to sit down here and tell you that certain companies will definitely go public within a year… or within five years… ten years… whatever.
Because the truth is – no one can really know something that precisely.
What I will say however is that the firms I aim to help you discover will have the potential to be sold to trade, or even IPO sometime in the future – maybe within five years. What’s more, there’s a developing secondary market – so you don’t necessarily have to wait for an exit.
The biggest gains are for the earliest investors, though.
So in terms of investing in them… the earlier you can get in, the better. But you can be too early – and we’ll show you how to spot that too.
Nick: Ok, thanks very much Andrew.
I’m really looking forward to the main event on Tuesday 3 October.
Andrew popped into our offices earlier this week for a quick test run and his passion and energy for this kind of investing really shone through.
Next week’s call promises to be hugely informative, and it’s sure to give you a massive edge when it comes to this kind of investing. It’s something you will not want to miss.
I really hope you can join us on Tuesday.
Publisher, Southbank Investment Research