Over a month ago, I wrote the following post on Linkedin (slightly modified for this blog post):
Is Crowdcube the greatest market intelligence platform? How many of you take tiny punts (from £10 onwards) on Crowdcube simply to get insights? It’s a great resource to understand new entrants, as well as easily reuse market analysis done by your competitors. You could also use Q&A to learn what you don’t know. I’ve just recommended my best customer to get on board. I am yet to explore Seedrs. At the end, you end up building a portfolio without realising, which may or may not offer a decent return (I believe Revolut already returned 19x).
Let me expand above.
If you ever want to build a tech company with a sustainable competitive advantage, you need to understand your competitive landscape better than all your competitors. And you need to maintain this knowledge at the highest level possible. As part of this strategy, you need to understand who is already competing with you and how they compete with you today as well as how they may compete with you tomorrow. In addition, you need to understand who is entering your market today and how they would threaten your market dominance tomorrow. You need to continue to build barriers to prevent others from reducing your market share. However, the most scariest part of this strategy is not knowing who might compete with you tomorrow, because they are invincible to you today.
Why CrowdCube, Seedrs, et al Matters
Crowdfunding has made raising investment easier. Don’t get me wrong though, as there are plenty of companies who struggles to complete their crowdfunding campaigns successfully. But overall, crowdfunding has provided a new low cost mechanism for tech companies to raise investment at significantly higher valuations. Fuel by this demand, the number of crowdfunding sites in the UK have started to explode. This has allowed more and more companies to list their campaigns on these sites.
Cheaper Marketing Research
Thanks to crowdfunding sites, now you have an option to understand potential competitors before they become significant threats. In addition, these companies’ pitch decks include marketing insights about the sectors you operate in as well as new sectors you could move into, all of which you can access for as little as £10 a company.
The Side Effect – the Birth of Nano Investor
As you spend £10 each (the minimum investment allowed by CrowdCube), without you realising you will end up with an investment portfolio. Whilst £10 is never going to make a fortune, it may well bring significant return in terms of the money spent. In the process, you will become a Nano Investor.
Nano Investor or Punt Investor?
What you call yourself is entirely up to you. But as the reason for investment is market research, I believe Nano Investor makes more sense than the Punt Investor.
Performance of CrowdCube
In November 2012, Darren Westlake, the Founder and CEO of CrowdCube visited Manchester to introduce his new service to Techcelerate Network. Unfortunately, we could not attract Seedrs to speak at the same event. As a result, I have built a fondness for CrowdCube over the years. And today, I am a Nano Investor with a Nano Investment Portfolio. If you want some stats on CrowdCube, just check out the embedded document below.
Do you have a sense of humour?
Please note this is not sound investment advice. But if you decide to act on above, do leave a comment. If you think this is crazy, do let me know your views as well. Thank you for reading.
PS: I hope Darren won’t kick me out of CrowdCube.
#PuntInvestor is defined as someone taking a punt with an investment size between £10 to £1,000. I’ve already converted my first customer into a #PuntInvestor for market research. But at the top end of PuntInvesting, few people when joined can start to make the difference between closing the investment round or not.
Update 2 – 12th Nov 2019
As I am just about to take another punt, my current punt investment portfolio now includes:
- Crowdcube: WiseAlpha, GoHenry, CrowdCube, Coconut, Propio, Cazana, Chip, Pavegen, JustPark, Rentify, Drfocused, Doctaly and CarWow (under processing) – seems to be a lot of FinTechs
- Seedrs: PaySend, Jaja, Upgrade Pack and CityFalcon – once again, a lot of Fintechs
Obviously, punt investing as you can see from my mini-portfolio above does not fall into strategic investing. In my case, various reasons have led me to take a punt. None of those companies is a competitor nor a partner of Techcelerate. It’s just for a bit of fun!