Companies are growing increasingly appreciative of the ‘crowd’, to a point that not having an energised and engaged crowd following is to have a competitive disadvantage.
The best way to acquire a loyal core crowd is to offer equity in the company. We’ve seen it work very well for start-ups, but I’ve not really heard (happy to be corrected) companies actively looking to secure capacity for the crowd at IPO stage.
For me it’s a part of the value chain worth Freetrade exploring i.e. securing IPO allocation to offer to its customers. Feels like a win for all parties involved and can’t think of any structural barriers in terms of the mechanics of an IPO. Can’t think of any barriers to wealth providers offering IPO access directly and from what I have read it is already a trend, but I think Freetrade are well placed to position itself as the fintech leader in this space, for a few of reasons:
- Freetrade offer access to a ‘crowd’, not just a retail investment channel
- The Freetrade customer base should align with the crowd that companies are looking for, in terms of demographic, diversity, engagement, mindset and ave. size of investment
- Freetrade itself could be a preferred distribution ‘partner’ for companies in terms of corporate values, transparency etc plus the fact that Freetrade itself has an engaged and crowd representative of its customers
- Freetrade will have the execution only architecture
- IPOs should be considered and monitored as part of a more diversified portfolio, which you get through Freetrade
Could work well for Freetrade from a marketing perspective too, leveraging big exclusive IPOs to get the Freetrade name out there.
I’m sure there are reasons why it might not a strategic direction and/or priority for Freetrade in the near future, but wanted to throw it out there for thoughts.