Courting the Modern Investor - A Revamp in Expectations

For a long time, the job of courting investors and keeping them happy has been a somewhat traditional process. Reach out to investors using an investment teaser, be ready with a pitch deck, and get ready for merciless due diligence. Relationships with the right people - or working with someone with the right relationships - always make light years of difference. 

The goal has been to show people that your venture will pay off big in 5-7 years.

Well, recently I had the privilege of asking Arthur Weissman to share some advice with you on trends in the marketplace that he has seen. Arthur Weissman is the Co-Founder of Industry FinTech, an advanced fintech platform designed for private companies to automate back office services, supporting privately held entities, investors and investments. 

Working with the many clients who take advantage of Industry FinTech’s platform gives him a bird’s eye, live view of shifts in investor preferences. And things have definitely changed since you (or your banker) were an analyst on Wall Street.

With interest rates being so high, investors no longer need to take high risks to get a good return. So investor interest is shifting away from investing in ventures, operating businesses, or even asset-based investments like gold or real estate, because in all of these money is only really made when the security is sold. 

Instead, investors are moving towards investing for a specific, real time return and are aggressively seeking dividends. Investors will no longer wait 5-7 years to see how their investment pans out.

Furthermore, with the advent of crowdfunding, more and more investment decisions are being made on the retail level (think through facebook and tiktok ads!), and based on feelings, experiences, and instant gratification.

Retail investing and “crowdfunding perks” have created an investment culture where even accredited investors are looking at more than financial returns. They want to co-invest alongside famous people, or to support restaurants that they go to on a regular basis. 

They also want greater transparency. I’ve personally seen that many startups don’t even provide the bare minimum of reporting to investors, which is considered quarterly. Now, they want regular, quarterly reporting and reward monthly reporting. Want to kick things up a notch? Provide monthly dividends with that reporting. 

Arthur shared a surprising example of how game-changing the commitment to monthly dividends can be. He works with a REIT that offers a 1% return every month. Every single month, investors get a dividend check. Here’s the clincher - there is no liquidity - you only get your money back if the fund shuts down. In May alone, this client raised 10 mln USD just through retail facebook/tiktok ads.

The Industry FinTech platform, amongst its primary functionalities, serves as fund administrator. It is the only fund administrator built on a payment gateway that can calculate cap tables and dividends automatically, as often as you please. You can now make hassle-free, audit-proof monthly (or with whatever frequency your investors desire) dividends. 

Industry FinTech does not reserve this functionality to its VC/PE/REIT clients, but also extends it to ventures and other companies taking advantage of their technology. Not in a position to offer dividends, because you’re still in ultra-growth mode? No problem. You can still offer investors fun financial incentives like additional monthly shares. A recalculated cap table is just a click away. Pretty freaking cool, right?

What I really like about Industry FinTech’s platform is that it’s not just an incredible financial technology platform. What’s a racing car without a racecar driver, and a pit crew? Industry FinTech has a live team that will make sure you are fully taken care of. Go ahead and call them when you’re not sure exactly which one click to make in order to send that distribution. 

​I’m proud to have served Arthur and Industry FinTech through SH International, and am looking forward to working with him in the future. I may even consider bringing my fintech investor relations clients - when the specific client fit is right - onto his platform. That's the fun thing about a solid business relationship with the brainiac behind a spectacular venture. You never know exactly what is in the cards beyond any particular engagement.