Due to modern lexicon rules, a new company in America is frequently designated as a “start-up”. By definition, a “start-up” is a new company.
Sometimes, new companies or investment opportunities are eye-popping, and sometimes they fly under the radar but are still potentially lucrative for investors who want to get in on the ground floor.
But investors are wary of new investment opportunities, especially when they appear to come out of left field.
A perfect example is Virgin Galactic, which plans to provide tourist trips to outer space by sometime in 2020. It recently announced plans to go public and an IPO is scheduled for the end of 2019.
As part of its monthly research with investors, Spectrem adds questions to its surveys that deal with new trends or topics that might be of interest to wealthy investors. In July, investors were asked if they have any interest in investing in companies that are involved in space exploration or tourism.
The answer, generally, was no. But that doesn’t mean they don’t want to know about such opportunities.
Of the more than 800 investors surveyed, 23 percent showed some level of interest in investing in space exploration and tourism, but the percentage of those with strong interest was only 4 percent. The remainder (78 percent) said they had no interest in such investment opportunities.
Those results are not surprising. “Speculative’’ investment opportunities are an acquired taste, and there are hundreds of horror stories of investors allocating large sums to surprising new products which don’t work out.
But there is always going to be some investors who are looking to the future and have an eye for knowing when something that starts out as speculative has a solid footing in the interests or needs of the consumer.
The Spectrem survey in July asked investors if they want their advisors providing information on such emerging companies or industries, telling them to place their level of interest on a 100-point scale. Among all investors, the level of interest in being presented with such opportunities was listed at 25.47, but among those investors who are self-described as aggressive investors, the interest level climbed to 34.99, which is still not demonstrably high. Millennials, who are by definition a bit riskier with their asset allocations, rated their interest in such information at 44.14, which is nearing the midpoint.
Going one step further, 54 percent of investors said they will listen to their advisor about such types of speculative investment options, including investing in an IPO, and 27 percent said they seek advisor input regarding those types of investment opportunities.
©2019 Spectrem Group
Keywords: investors, advisors, Spectrem, IPO, emerging, startups