Exclusive: 24% of Brits abandon IPOs in search of lucrative returns

A quarter of British adults agreed that seeing Unicorns and their initial public offerings (IPOs) fail or not fulfil their potential, such as Uber’s, has made investing into them less attractive.

Figures provided by NextHash, a digital security offering exchange for potential successful start-ups, has found that Britons are more wary of investing in IPOs, while a third of them have called for more flexible ways to invest into businesses than stocks, shares or venture capital investments.

The findings suggested that co-working space firm WeWork’s IPO, planned for later this year, may not be as successful as intended. The company is currently looking at which banks could lead its IPO, with JPMorgan Chase in pole position, and hopes to raise a minimum of $5bn through the bond offering and is then looking to go public as soon as September.

However, NextHash has questioned the future of this route of growth finance, particularly with the “shadow of Uber’s IPO still looming over many unicorns”.

However, just one-in-five British investors claimed that gold and real-estate did not provide them with the rapid return on investment they can expect from high-growth, internationally-facing companies.

Furthermore, 28 per cent of Brits would consider using digital security offerings if there was an unbiased, trustworthy source of information about them.

The data also suggested that a majority of Brits were security-savvy, with 68 per cent only trading or investing where there is security of protection against fraud for their investment – particularly among older investors, where this applies to 84 per cent of investors over 65.

On the other hand, younger investors are calling for more ways to invest as opposed to more security. Almost 40 per cent of those between 18 and 24 and 42 per cent of those aged 25 to 34 want more flexible ways to invest into businesses than stocks, shares of venture capital investments.

A majority of UK investors also look unfavourably towards Brexit, with over half of those aged between 18 and 44 concerned that the UK’s departure from the bloc will scare away investors from investing in the UK, and almost two-in-five Britons worry that Brexit will lay waste to investment into growing UK companies.

Commenting on the findings, NextHash founder and president Ana Bencic said: “With various political and economic influences affecting businesses today, investors are looking for ways to gain rapid and secure returns on their investment on an international scale. IPOs have been receiving a substantial amount of negative press, and this is worrying both institutional and retail investors who are looking for a better and secure solution to access internationally-facing high growth start-ups.

“With Brexit around the corner, Brits are seemingly concerned about the potential impact that the UK leaving the European Union could have for high-growth UK businesses. Millennials appear to be the most concerned generation about Brexit’s effect on UK growth finance, but many people do have concerns for what could happen to high-growth businesses after 31st October.

Bencic added that if the UK does begin to look at other avenues of investment, blockchain platforms could be a "potential solution" to generate interest into UK start-ups.

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