6 signs to invest in an emerging brand
How to spot a company with great investment potential
Two groups of shoppers walk into the supermarket and are sent to a display of jams. One display contains six different flavour choices, the other 24. Which group do you think bought more jam?
You might be surprised to learn that the group given six choices purchased more items. As this famous psychology experiment shows, when we’re presented with fewer options, it helps us to make more informed decisions.
With multiple ways for companies to raise money, investors are spoilt for choice. However, this can feel more worrying than exciting; what if you back the wrong business?
Strong decision-making criteria is critical to backing the right investments. Rather than considering every offer on the table, you need a set of benchmarks to measure each company against. This way, you can quickly filter out the weakest propositions – and focus on the brands most likely to deliver return on your investment.
At WeOwn, we’re in the fortunate position to work with a lot of high growth businesses, helping them to raise capital via our digital investment platform. We’ve become experts at spotting the ‘next big thing’ – and we’d like to share some of the common signs of success…
1. The company offers something different
If the product or service that a company is providing makes you sit up and take notice, you’re onto a good thing.
In highly competitive marketing, businesses need to offer something better, quicker or unlike what’s already out there in order to be successful. A clearly differentiated proposition shows that the brand has taken time to do their research, identifying an opportunity in that market.
2. They can articulate what makes them special
Sometimes brands have a great concept, but they struggle to communicate how they’re different to their rivals.
It’s especially important if they are selling products or services to consumers, as a good sales pitch is what will help them seal the deal and ultimately drive more profit for you.
3. They know their industry (and have a proven track record)
The best emerging brands are experts in their field and have developed products and services as a result of seeing a gap in the market.
WeOwn is a great example of this; our founding team worked in the corporate financial world and grew frustrated with the lack of user-friendly technology that could make investment easier for growing companies. That’s why we launched our digital asset marketplace.
In addition to sector expertise, it’s also worth checking if company leaders have launched successful business ventures before. This shows they are able to spot a strong opportunity and deliver on their promise.
4. They know where they’re going – and how they’re going to get there
A strong proposition and USP is just the start; high growth companies have a clear roadmap ahead of them, which supports their ultimate goals.
Companies that know where they are going ensure that all business activities are focused towards this goal, so they’ll spend your investment wisely. It’s also likely they’ve mapped out interim targets, so they know what the short-term objective is to support the bigger picture.
5. They want you to be part of their success story
An emerging brand needs advocates to start creating a buzz, so smart companies will value your opinions as much as your investment.
One of the strengths of discovering new investment opportunities through WeOwn’s digital platform is that we offer businesses far more than just the tools for raising capital. Our marketplace has in-built communication features including digital voting, online company updates and instant messaging channels. This makes it easy for the firms you’re investing in to engage and consult you, making sure you’re a valued part of their development.
6. You believe in them
People think about the ‘head’ aspect when deciding who to invest in, but the heart often matters just as much. If you’ve narrowed it down to a shortlist but only have the budget to back one company, go for the business you care about most.
The great thing about making money through investment is that you get to help emerging brands succeed – and that success will be much sweeter if it’s a proposition you truly believe in.
Plus, smart companies will offer you perks along the way to thank you for your support. If it’s something you have a genuine passion for, you’re much more likely to enjoy these rewards!
Find the hottest emerging companies and back their business: sign up to WeOwn’s Digital Marketplace.