What are the main considerations for investors backing an early stage business?
This was one of the questions answered in a recent research project from equity crowdfunding platform Seedrs. The results of their State of the Investor 2023 survey are now in – and here’s a snapshot of what they learned.
Tax relief schemes are a major consideration when choosing to invest in an early stage business, according to 70% of those surveyed. What’s less important now than before is the possibility of substantial returns – a factor cited by 54% of investors in 2022, but only 47% in 2023. An affinity with the companies in question has grown in importance, with 57% saying “supporting industries you believe in” is a key reason to invest in startups, and 48% citing “supporting brands you believe in” as a factor in their decision.
The role of macroeconomic pressures
As a result of the wider economic climate, 50% of investors say that they are investing less now than in previous years. This corresponds with the decline in net investable assets seen in the survey results: 12% of those surveyed have over £500K of assets and 30% have over £100K – figures that have dropped from 14% and 35% respectively in 2022.
How important is ESG?
Very important. 78% of investors surveyed say that they consider ESG factors when deciding on where to invest, with 48% already holding ESG investments of some form.
Of those who say ESG is important, it’s climate-related investing that is the priority. 74% of this group state that investing to have an impact on the climate of importance.
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