At a time when Keir Starmer is promising to build a Britain that works for everyone, and Chancellor Rachel Reeves continues the theme in her speeches, those of us working to actually build small companies into bigger ones face daily challenges.
We fight to attract investors, we battle through layers of red tape, and we strive to deliver innovative products that could make life better for everyone.
But despite these efforts, one truth remains: we need retail investors to succeed.
Those of us who have built small companies and listed them on London’s stock exchanges—whether the LSE, AIM or the Aquis Stock Exchange— are natural optimists. We don’t take ‘no’ for an answer, and we’re determined to deliver value for our shareholders. Yet small-cap companies are often overlooked, under-analysed, and dismissed. There’s always risk involved; after all, big returns don’t come without it.
Jump in: Melissa Sturgess says a common reason for low numbers of female investors is a lack of confidence
But with so much capital flowing into index funds, many exciting opportunities in smaller listed companies are being ignored. There is one upside, the current malaise has created valuation anomalies unrelated to the fundamentals of the business – bargains, in other words.
Warren Buffet famously said that if you believe in a company, a lower share price should be seen as a signal to buy more, not walk away. Investors should look at smaller companies in the same way.
In fact, small-cap investors have an added advantage: the ability to engage directly with company management and actively participate in the company’s journey. This level of involvement creates not only financial returns but also a sense of personal investment in a company’s success.
So how do you learn to invest? The same way you learn to trust someone—by doing it. There are plenty of online share trading platforms in the UK that make investing easy, secure, and affordable. You don’t need thousands of pounds to get started. As little as £100 can get you into the game. The key is to take that first step, and experience will teach you the rest.
If we don’t start backing small companies, helping them grow and do vital work, who will? We can’t rely on pension funds—they lost their ability to support small businesses long ago. Nor can we count on larger funds, which seem to have lost interest in supporting entrepreneurs in the listed company space. The support for small businesses must come from us, from individual investors determined to see Britain reclaim its place as a powerhouse of innovation and success.
Reforms to simplify share investing are long overdue. Such changes would not only benefit individual investors but also provide growth companies with broader access to capital. Unfortunately, today’s entrepreneurial businesses face the looming threat of tax reforms—such as changes to inheritance tax—that could have the opposite effect. To add to their challenges, these companies are increasingly being marginalised on share trading platforms.
It’s no surprise, then, that small-cap companies are exiting the market in significant numbers, with many considering a move to the US, where investors are more attuned to backing growth.
And it doesn’t stop there. The next generation of unicorns is staying private longer, allowing private equity and venture capital to capture the early-stage growth and value appreciation, leaving retail investors with fewer opportunities post-IPO.
That said, improving access to investment opportunities is only part of the challenge. Another crucial step is encouraging more women to become investors, especially in small-cap listed companies. There’s a lot of talk about why women don’t invest in shares, and one common reason is a lack of confidence. The solution? Start with what you know. Invest in companies that sell products or services you use and believe in. I’m not suggesting betting your retirement money on small caps, but most of us can afford a small amount to dip our toes into the market.
As the chief executive of Ananda Developments, which is conducting clinical trials for a CBD-based drug to treat chemotherapy-induced pain and endometriosis, I hear from male investors all the time. I receive daily WhatsApp messages from a group of 75 male investors who trade Ananda shares and constantly ask me about endometriosis research.
Yet I can count on one hand the number of female investors who reach out, despite the fact that endometriosis affects 1 in 10 women worldwide. Where are the women investors? This is a cause that should resonate deeply with them.
It’s time for all of us—men, women, and anyone who believes in innovation and growth—to start supporting small-cap companies. Let’s invest, have some fun, and maybe even make some money. More importantly, let’s help get this country moving again. Britain has a long history of entrepreneurial spirit, and we need to rekindle it. Supporting small businesses is how we do that.
The future of Britain’s economy doesn’t rest solely on government promises or speeches. It rests on us—the investors, the entrepreneurs, and the people who believe that small companies can make a big impact.
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