Starting in 2011, I began an investor relations research project. As far as I can tell, no survey or interview of a significant number of investors has been conducted at the micro-cap level…
To date, 407 micro-cap investors have been interviewed or surveyed. The results have not surprised me. It seemed obvious that investors had changed how they select companies to invest in given that all the traditional methods to reach them no longer worked. However, the methods and especially the margins of the change in their methodology came as a surprise.
The first thing that caught my attention was how the majority of these investors were “finding” companies to invest in. Moreover, I literally mean FINDING.
Another set of statistics from my research that was somewhat surprising was how miniscule the number of these investors who used stock message boards (which used to be a popular destination) to find investments. An equally small number of these investors used email or other forms of solicitation to choose their investments from. It was also clear that social media was playing a big role and could really be grouped in with search marketing. Investors were using social media tools to search for keywords and search terms within the social media platforms themselves.
Investors of micro-cap companies have changed significantly just over the last few years. The investors are not sitting around waiting for promoters and IR to spoon-feed them the next big thing anymore. They are looking for the next big thing themselves.
The Fundamental Change and Profound Statistics
In the graphic below, you will see that the majority of the investors surveyed or interviewed searched for their investment using a SEARCH ENGINE like Google, Yahoo, Bing or other. I knew that more and more investors were using search engines to find investments but, after nearly 5 years of research, the number, 64% was stunning.
Let me reiterate: The majority of investors are using search engines; not email, or hard mailers, message boards or listening to an interview of a CEO. Now, let us get into the meat and potatoes of what has changed and why it has changed and how, by understanding the mentality of contemporary micro-cap investors, Your Company can BENEFIT!
Download our InfoGraphic to see how investors have changed over the last few years.