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Alternative Finance blog


The Equity Market Shift

06/11/2015 | 0 comments


As David Houle internationally acclaimed futurist, author and speaker coined the phrase “the shift age”; Sacha Bright CEO and founder and Businessagent.com the UKs first equity and debt crowdfunding aggregator coins the phrase “the equity market shift”.

David Houle says we are in a shift age. A space in time where the speed of change is constant. To keep up you have to adapt to change; one day you're using a pager, the next a mobile, then a smart phone and then you're tweeting, what'sapping and using driverless cars.

Sacha Bright says; the city is in a shift, just like the music and the travel industry before it , the equity market is about to shift from mainstream markets to online platforms.We are seeing companies like Numis and Rothschild invest in equity crowdfunding and it makes sense. The equity market needs to open up to the public.  It’s tough for institutions like AIM to adapt with the rapid rate of change and that's why companies like businessagent.com, crowdcube and seedrs are creating new equity markets.

I often get asked about what is being done to protect investors and whether there are measures in place to prevent fraudulent activity such as unscrupulous entrepreneurs absconding with investment funds. The answer is very little other, than what the law states about such incidents. It's fundamentally the same as in the main markets, even the most experienced investors fall foul to crime or false claims.

For example Green China Holdings (GCH), Rare Earths Global (REG),LZYE Group (LZYE) and Kada Technology (KADA), all of which went private or announced plans to voluntarily delist their shares from AIM leaving investors holding shares that are essentially worthless. A piece of paper purporting to control a small percentage of an unlisted, illiquid business in China, from which shareholders will almost certainly never receive a dividend, is probably worth less than the paper it is printed on.

The difference with equity crowdfunding is that the fund is backed by the crowd and the crowd talks. The crowd is often made up of family, friends and altruistic investors who care. If anything untoward happens it's pinged, blogged and shared across the net very quickly. Its open, sharing and transparent, whereas the existing equity model is expensive, closed, privileged and excluding. If something happens it's in the board room, for the privileged few and it takes an investigative journalist to uncover. This is not to say that Equity Crowdfunding is without risk, investors should be aware that these are usually long term, illiquid opportunities and all capital invested could be lost.

We are not the same people we were 30 years ago, we are sharper, more independent and mindful and are operating in the information age.

When Google’s CEO, Eric Schmidt, went on the record saying: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” Most of the information you need to know about a company or a person is available somewhere on the net. Your trust equity is out, on your credit record, on your social network and indexed in Google. If a company is doing something wrong the most insignificant person with a twitter account can publish information that can be shared in minutes across the internet with millions of people. The market has never been so open.

From our phone we can do more due diligence in 5 minutes than you could in a month 10 years ago. Back then you would pay a research company, solicitors and accountants thousands of pounds to do what sites such as duedil, google, facebook, linkedin and equifax do in minutes. Clearly it is still advisable that investors take independent professional advice but a plethora of information is now readily available online.

The equity market shift is happening now and businessagent.com has a vision is to create a new alternative finance market place that is open and transparent to everyone.



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